Gov’t tax efforts target Chinese Pogo workers

The government will run after the taxes of foreigners, mainly Chinese nationals, working in the booming Philippine offshore gaming operators (Pogo) industry, the Department of Finance (DOF) said.

“The list of foreign nationals working for service providers of Pogo should be consolidated and reconciled by the various agencies and offices involved in screening, providing work permits and registering them,” Finance Secretary Carlos G. Dominguez III said in a statement.

These agencies included the departments of Foreign Affairs, Justice (and attached agency, Bureau of Immigration, or BI), Labor and Employment (Dole) and Trade and Industry, Philippine Amusement and Gaming Corp. (Pagcor) and the Securities and Exchange Commission.

“If we get all that information, then it is possible that we can begin to collect taxes, enforcing the law on foreign workers operating here. Isn’t that what we really want to do here, enforce the law?” Dominguez was quoted by the DOF as saying in a recent meeting with the heads of these agencies.

As early as 2017, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular No. 102-2017 that slapped a number of taxes on Pagcor-licensed Pogo activities in a bid to “lessen” forgone revenues from such businesses.

Internal Revenue Commissioner Caesar R. Dulay subsequently issued RMC 78-2018 last year, a set of “special rules” on Pogo registration with the BIR before they could renew their Pagcor licenses.

RMC 78-2018 “mandates the BIR to identify and monitor tax payments, including remittances of taxes withheld on foreign nationals working for them,” the DOF noted.

But Revenue Deputy Commissioner Arnel Guballa was quoted by the DOF as saying that only seven of 10 local Pogo licensees were registered with the country’s biggest tax collection agency, alongside just eight of 44 offshore operators.

“A good starting point would be to trace the employers of these foreign workers so that a portion of their salaries could be withheld and turned over to the government as partial payment of their income taxes … Besides ensuring that foreign nationals comply with tax laws, it is imperative for the government to find out who and where all these alien workers are, given the national security implications of their large presence in the country,” Dominguez said.

During the meeting, Justice Secretary Menardo Guevarra said that as of mid-2018, “less than 95,000 foreign nationals were issued by the BI with various forms of temporary work permits as Pogo employees.”

However, Pagcor chair Andrea Domingo was quoted by the DOF as saying that Guevarra’s figure was “not accurate because foreign workers that were given six-month SWPs (special work permits) may have already secured provisional working permits and remained on the list of those still with SWPs, while those with provisional working permits may have already been issued AEPs (alien employment permits) by Dole.”

“The numbers may overlap … Since the Pagcor only registers Pogo operators but is not tasked to regulate foreign workers’ visas, the BI and Dole should be able to compile an accurate list of foreign Pogo workers,” Domingo said.

Dominguez said he expected members of the Dole and BI-led interagency task force monitoring the number of foreigners working in Pogo to come up with a “complete and clean” list of all foreign workers in offshore gaming operations in the country within the next 30 days.