Gov’t loses P3B/mo in tax revenues from foreign Pogo workers

The government is losing at least P3 billion in tax revenues a month from foreign workers in the Philippine offshore gaming operators (Pogo) industry who do not pay personal income taxes, Finance Secretary Carlos Dominguez III said on Wednesday.

“It is so unfair that Filipinos doing the same kind of work pay tax. Why should foreigners not pay tax? That’s the law. All I want is fairness,” Dominguez told reporters on the sidelines of The Manila Times’ Ninth Business Forum.

Dominguez said the government was going after both employees and companies.

“If they (companies) are operating under investment incentives, that’s fine with me. But there is no investment incentive for foreign workers. There is none—the law says you work here, you pay tax. Anywhere in the world, it’s the same: You are a foreign worker, an OFW (overseas Filipino worker) in the United States, you pay tax. Why shouldn’t they pay tax here? It’s unfair,” Dominguez said.

A rough calculation by Dominguez showed that with an estimated 100,000 foreign Pogo workers earning about $2,500 a month, each would have to pay about $600 as the 25-percent personal income tax.

“That’s $60 million (over P3 billion) a month that we seem not to be collecting. I checked with the BIR (Bureau of Internal Revenue), they said they don’t have a clue. What?” Dominguez said.

The finance chief added that there were national security implications if these foreign Pogo employees were not registered with the government.

“If there are some Chinese, some Ethiopians or whatever, they should pay tax. We want it to be fair because Filipinos working abroad also pay tax. We’re not asking anything special, just follow the law,” Dominguez said.

The finance chief earlier asked the departments of Foreign Affairs, Justice and its attached Bureau of Immigration, Labor and Employment, Trade and Industry as well as the state-run Philippine Amusement and Gaming Corp. and the Securities and Exchange Commission to come up with a consolidated list of all foreigners working for Pogo service providers in the country in order to collect taxes due them.

The BIR earlier disclosed that only seven of 10 local Pogo licensees had been registered with the country’s biggest tax-collection agency, on top of only eight of 44 offshore operators.