BIR seeking P3B more from online casino workers as firms say foreigners already residents

The Bureau of Internal Revenue (BIR) has issued a new batch of notices to collect another P3 billion in personal income taxes from foreign, mostly Chinese, workers in Philippine offshore gaming operations (Pogo) even as firms sought to pay lower tax rates by claiming that their employees were already Philippine “residents.”

Internal Revenue Commissioner Caesar R. Dulay told reporters on Thursday (July 11) that the new notice letters issued this month by the bureau were on top of notices sent earlier seeking to collect at least P4 billion in back taxes last May.

BIR Deputy Commissioner Arnel Guballa said the notices for P3 billion in taxes were for “current” tax payments, while the previous P4-billion worth of demand letters covered back taxes.

In July, the BIR will start collecting at least P2 billion in income taxes from Pogo workers—mostly Chinese, after which the agency will go after more of the previously unpaid taxes.

Guballa said Finance Secretary Carlos G. Dominguez III and Dulay gave instructions to prioritize the collection of current taxes.

The Pogo sector currently employs up to 130,000 foreigners, but Guballa said the BIR believes there could be more unregistered firms and workers out there nationwide.

Under the joint memorandum circular (JMC) signed by the DOF and the Departments of Justice (DOJ), Foreign Affairs (DFA), and Labor and Employment (Dole) on Thursday (July 11), foreign workers must now first register with Philippine embassies abroad and secure a tax identification number (TIN) before they can be employed in the Philippines to ensure collection of correct taxes from them,

Guballa said the BIR was already processing TINs for Pogo workers who have not registered as taxpayers.

But Guballa said some online casino operators are appealing for their employees be taxed with the same rates as residents, arguing that the Chinese had been living in the Philippines for at least six months.

Nonresidents are supposed to pay higher taxes than residents.

Dulay said online casino operators seeking lower tax rates could do so in courts “but our collection process will continue.”

“The burden of proof is with them—they must prove that they were living here for a long time already, and they’re registered with the Bureau of Immigration and Dole,” Guballa said. /tsb