BIR struggles to cope with surge in TIN requirements for Pogo workers

Philippine offshore gaming operators (Pogos) must withhold personal income taxes from all their foreign—mostly Chinese—workers even as the Bureau of Internal Revenue (BIR) has been having difficulties in issuing tax identification numbers faster and in volumes bigger than usual, the Department of Finance said.

In an interview, Finance Undersecretary Antonette C. Tionko said the BIR had so far given 10,000 tax identification numbers (TINs) to previously unregistered Pogo workers in Manila, Parañaque and Pasay.

Tionko said there were “limitations” in the volume of TINs that could be issued by the BIR and that they could not immediately provide TINs to as many as 130,000 unregistered Pogo workers.

Finance Secretary Carlos G. Dominguez III said the majority of foreign Pogo workers in the country did not have TIN yet.

Also, Tionko said the BIR could not speed up the issuance of TINs as they were ensuring that the Pogo workers’ correct personal information were being inputted in their respective registration forms.

Despite this setback, Dominguez and Tionko both said the issuance of TINs would continue until every unregistered Pogo worker was covered.

Dominguez also noted that Pogos could already withhold the 25-percent monthly personal income tax from their employees, “but when they remit to the BIR they have to get a TIN.”

Even as most Pogo workers still do not have TINs, their employers must later on remit the taxes they withheld as soon as the TINs were secured, or else they would be slapped a penalty equivalent to 50 percent or double the personal income tax rate for committing a criminal offense, Tionko warned.

Dominguez earlier said the BIR was expected to collect an additional P2 billion in taxes a month as Pogos had committed to religiously pay their dues starting this month.

“We will start collecting in July, but then we will not collect everything from everybody—it will ramp up,” Dominguez said.

“We are not taxing them for their operations—we know they are tax-free in the Peza [Philippine Economic Zone Authority] zones. But that doesn’t excuse them from withholding tax—it’s their obligation to withhold tax from the pay of their workers, that’s the law,” he said.

Dominguez blamed the Pogos themselves for not securing TINs for their employees as soon as possible.

“They are complaining, because our system is not set up to register 100,000 a week then all of a sudden you have 100,000… It’s not our fault—they didn’t register. We can’t have a system that’s for registering 100,000 a week. We can’t do it [but] it’s not our fault—they didn’t register [in the beginning], now why is it all of a sudden our fault?” he said.

As for some Pogos’ claim that their workers should pay lower rates given that some of them were supposedly already Philippine “residents,” Tionko said: “The default is they are nonresidents and the burden is on the company to prove that they got the work permit or they have residency certificates. If they can’t show anything, it’s 25 percent.”