130K Chinese workers not paying taxes

The Bureau of Internal Revenue (BIR) is going after the income tax payments of more than 130,000 unregistered Chinese working in the Philippine offshore gaming operators (Pogo) sector.

Internal Revenue Deputy Commissioner Arnel Guballa told reporters last Monday that the BIR had expanded its investigation to also include about 2,000 foreigners employed in the Clark and Subic economic zones.

“They are consultants, engineers, designers, IT (information technology workers)… Our estimates showed that there are around 2,000 [foreign workers in economic zones] but what we are really prioritizing are the Pogos,” Guballa said.

The BIR official said majority of the Pogo workers in the country were Chinese.

He said all of these Chinese workers in Pogos did not secure tax identification numbers (TIN) from the BIR. As such, they are not registered as taxpayers.

“We are looking for all of them. Although they are employed in online gaming, what we are checking is if they are paying their taxes,” Guballa said, as he noted that some Pogo firms actually had remittances to the BIR.

“We will check if their remittances are correct, if [payments were] below the actual [income tax] rate or below the declared income. We are counterchecking the income that they receive,” he said.

Before this month ends, the BIR will finalize the list of Pogo workers as it is currently in the process of validating data.

For those to be found not paying taxes, “we will file the corresponding necessary enforcement—if you are not registered, then we impose penalties on those unregistered.”

Guballa said many Pogos were already registering because they now know that the government was very much aware of their activities.

But even after these Pogos finally register, Guballa said the BIR “will stretch back as far as we will determine [how long they were operating so they] will pay for all the penalties of all those violations.”

Early this month, the Department of Finance (DOF) said the government wanted to collect about P32 billion in unpaid income taxes from foreigners who work in the Pogo industry.

It was based on a rough computation by Finance Secretary Carlos G. Dominguez III on the assumption that up to 138,001 foreign workers earned an average of $1,500 a month and paid the 25-percent personal income tax.

Based on the report submitted to Dominguez by the Department of Labor and Employment and the Bureau of Immigration last month, 54,241 Pogo workers had been issued alien employment permits  aside from 83,760 who have special working permits.

For Dominguez, the reported salaries of foreign Pogo employees amounting to only P20,000 a month were “ridiculously low” for skilled workers.