The Department of Finance (DOF) is aiming to collect an estimated P22 billion annually in income taxes from Chinese workers employed in the Philippines’ booming online gaming industry.
To this end, an interagency task force formed to monitor the number of foreign nationals employed in Philippine offshore gaming operations (POGOs) is fast-tracking measures to finalize a complete list of these workers with the goal of taxing their wages.
In a meeting presided by Finance Secretary Carlos Dominguez III last week, the members of the group discussed measures to complete the foreign workers’ list after they “discovered gaps or inconsistencies” in the respective figures they had initially submitted to reconcile their records.
The members of the task force agreed to meet again with the Finance chief on March 29 to come up with the complete list.
“There are still gaps in the numbers and we need to close those gaps,” Dominguez said. “In our computations, there is at least P22 billion a year not being collected in the income taxes from these POGO workers who could possibly exceed 100,000 in number.”
He said the Philippine Amusement and Gaming Corp. (PAGCOR), Department of Labor and Employment (DOLE), Securities and Exchange Commission (SEC), Department of Justice’s Bureau of Immigration (BI), and the various special economic zones need to come up with a comprehensive list of these foreign workers employed in POGOs.
“We have to get a clear picture here,” Dominguez said. “If we do not have that, how can the BIR (Bureau of Internal Revenue) do its job, which is to collect taxes from everybody so that we are being fair to all Filipinos who are paying their taxes?”
During the meeting, BIR Deputy Commissioner Arnel Guballa said an initial list of 64 out of 205 service providers of POGOs showed that they employ a total of 33,000 foreign workers or an average of 515 per service provider.
Thus, with 515 foreign workers employed in about 200 service providers, the government should be collecting income taxes from about 103,000 aliens working here, Guballa said.
Guballa said BIR also came across a newspaper report in China stating that foreign workers in POGOs here receive an average of 10,000 yuan, equivalent to about $1,500 or P78,000 a month.
Dominguez said with an average income tax of 25 percent of their salaries, this yields an estimated amount of P18,750 a month left uncollected by the BIR from each foreign worker—or a total of roughly P22.5 billion a year in foregone income tax revenues.
This rough computation does not even include yet allowances and other fringe benefits, which are also taxable, Dominguez said
He asked PAGCOR to resolve this estimate and the claim by POGO service providers that these foreign workers are paid an average of P35,800 or about 5,000 yuan a month, representing only about $700 a month. /kga