China says online casinos illegal but PH to continue collecting taxes from them

The government will continue to collect taxes due from foreign—mostly Chinese—workers in Philippine offshore gaming operators (Pogos) and issue tax identification numbers (TINs) to those still unregistered even as the Chinese Embassy in Manila on Wednesday (Aug 7) said online gambling was illegal in the mainland.

“We will not suspend the issuance of TINs to foreign workers,” Finance Secretary Carlos G. Dominguez III told reporters when asked if the Bureau of Internal Revenue (BIR) would suspend TIN issuance to unregistered Pogo workers.

Dominguez said he had yet to see the embassy statement.

Citing Chinese laws, the Chinese Embassy said in a statement that “any form of gambling by Chinese citizens, including online gambling, gambling overseas, [and] opening casinos overseas to attract citizens of China as primary customers, is illegal.”

“The casinos and offshore gaming operators (Pogos) and other forms of gambling entities in the Philippines target Chinese citizens as their primary customers,” the embassy said.

“A large number of Chinese citizens have been illegally recruited and hired in the Philippine gambling industry. In many cases, the employers of Philippine casinos, Pogos and other forms of gambling entities do not apply necessary legal work permits for their Chinese employees. Some Chinese citizens are even lured into and cheated to work illegally with only tourist visas,” it added.

In a separate statement, the Department of Finance (DOF) said the BIR already collected P186 million in personal income taxes withheld from Pogo workers last month, with P170 billion more expected to be remitted to the country’s biggest tax-collection agency this month.

Finance Assistant Secretary Dakila Elteen M. Napao said the BIR had issued to 48 Pogos notices demanding payment of their workers’ taxes, with 22 firms that replied or protested the tax assessment sent to them.

Napao said the additional P170 billion in collections would be received by the BIR on Aug. 10, this month’s income tax remittance deadline.

At Monday’s Cabinet meeting, BIR Commissioner Caesar R. Dulay reported to President Rodrigo Duterte that the taxes collected from Pogo service providers have been increasing since 2017.

From P175 million in 2017, the taxes remitted by Pogo service providers climbed to P579 million last year and further jumped to P789 million during the first six months of 2019, Dulay said.

Pogos should withhold the monthly 25-percent personal income tax due from all their workers, including those who have yet to obtain TINs.

Pogos must later on remit these taxes to the BIR when their workers already have TINs

Dominguez had said they will collect P2 billion per month in additional tax revenues from all Pogo workers.

However, the BIR had been having difficulty issuing TINs because of the sheer number of mostly Chinese workers who are unregistered.

In July, the BIR issued 10,000 TINs even as the government had estimated as many as 130,000 unregistered foreigners were working in the Pogo industry.

An interagency joint memorandum circular issued last July also required all foreign workers to secure visas, working permits, and TINs before entering the country./TSB