Pogos seek lower tax rates for alien workers

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

Internal Revenue Commissioner Caesar R. Dulay told reporters Thursday that the new notice letters issued this month by the BIR were on top of the earlier P4 billion in back taxes that the BIR had tried to collect in May.

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

This month, 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 dues.

“The instruction of the [Finance] Secretary [Carlos G. Dominguez III] and of the [BIR] Commissioner [Dulay] was to prioritize the current [month’s tax payments],” Guballa said.

At present, the Pogo sector employs about 130,000 foreigners, but Guballa said they believed there could be more unregistered firms and workers nationwide.

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

Guballa said the BIR was already processing TINs for Pogo workers who still did not have TINs, as the JMC prospectively covered these foreigners.

However, Guballa said some Pogos were still appealing that their employees be slapped tax rates similar to those being levied to residents, arguing they were already living here in the country for some time or at least six months.

Nonresidents were supposed to pay a higher final tax compared to locals.

Dulay said those Pogo companies that were seeking lower tax payments should bring their issue to the 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.

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