Gov’t to collect P2-B a month starting July from mainly Chinese workers

An additional P2 billion in revenue a month will go to government coffers beginning July as the Bureau of Internal Revenue (BIR) finally collects the taxes due from workers in the Philippine offshore gaming operators (Pogo) sector.

“I just talked to the BIR last week, and they said that they are already in place to start collections from foreign workers in the Pogo industry,” Finance Secretary Carlos G. Dominguez III told reporters on the sidelines of the 2019 Pre-State of the Nation Address (Sona) Economic and Infrastructure Forum.

Dominguez said collecting taxes from foreign Pogo workers—who were mostly Chinese—would not require any new revenue regulation from the BIR as it was already mandatory under the law to pay taxes.

“I asked them [the BIR] specifically to track how much they are collecting. They said they will start making the collections in July,” Dominguez said.

The finance chief clarified that the taxes due in the month of July will already be collected by the BIR as salary deductions, but how to collect taxes previous to July was still unclear.

Dominguez said the government stood to collect about P2 billion a month from at least 100,000 Pogo workers, who are employed by online casino companies catering to mostly Chinese bettors.

He cited Bureau of Immigration estimates that the number of workers in Pogo was around 138,000.

“I’m sure there must be more—apparently, my friends tell me there are a lot of guys. I don’t know how many,” Dominguez said.

Industry insiders said the additional P24 billion a year to be generated from the Pogo sector was nonexistent four to five years ago before Pogo firms were regulated by the state-run Philippine Amusement and Gaming Corp. (Pagcor) during the Duterte administration.

While there remain concerns that some Pogo operators were still unregistered with the BIR, Dominguez said he was confident that law enforcement agencies can track them down.

“We will work together with the law enforcement if there are indeed unregistered Pogo operators to regulate them, to really look for them,” he said.

Dominguez said the initial focus was to start collecting taxes from registered Pogo operators.

“I told them, let’s do this deliberately step by step—whoever is registered should be compliant, then we will look for the unregistered,” Dominguez said.

“Let’s not try to solve the whole problem right away—let’s solve the ones in front of us,” he added.

In May, the BIR issued a second batch of notices to Pogo companies, asking them to shell out P3.4 billion in withholding taxes.

The BIR earlier issued notices to collect about P1 billion in taxes from other Pogo firms.

To ensure that all foreign Pogo workers’ income taxes are collected, the BIR, the Bureau of Immigration (BI), and the departments of Justice (DOJ) and of Labor and Employment (Dole) came up with joint guidelines mandating aliens to secure a tax identification number (TIN) before they can get working permits. (Editor: Tony Bergonia)