The Bureau of Internal Revenue (BIR) has warned that it would shut down Philippine offshore gaming operators (Pogos) that do not remit the personal income taxes of their foreign—mostly Chinese—workers.
“If they don’t pay and we’ve seen that they have not registered with the BIR, we’ll close them,” Internal Revenue Commissioner Caesar R. Dulay said last Friday.
The BIR’s “Oplan Kandado” closes down establishments that are unregistered and have not paid the correct corporate and value-added taxes as well as employees’ personal income tax dues.
Deputy Commissioner Arnel Guballa of the BIR said the country’s biggest tax-collection agency this month sent out letter-notices to some more Pogos to generate a bigger amount than the P4 billion in back taxes that the BIR tried to collect in May.
In July, six of the 248 Philippine Amusement and Gaming Corp. (Pagcor)-licensed service providers remitted P200 million in workers’ taxes, even as the government had targeted to collect P2 billion a month.
Dulay said the collection of corporate and personal income taxes from Pogos and their workers was ongoing. “We continue to enforce the law. That’s the only requirement—for them to comply with the law by paying the right taxes,” he said.
The BIR chief said he was optimistic that Pogos would comply as he pointed out that “all income sourced within [the country] is taxable” under the Tax Code.
“In the Philippines, income from whatever source—legal or illegal—is taxable,” Guballa noted.
Amid the Chinese Embassy’s concern that the Pogo sector was considered “illegal” in China, Dulay said it would be up to the state-run gaming regulator Pagcor to address the issue. “Our concern is to collect taxes,” the BIR chief said.
The BIR had been struggling to issue tax identification numbers (TIN) amid a surge in the number of applicants from the Pogo sector. Last month, the BIR issued 10,000 TINs, or covering less than a tenth of the estimated 130,000 unregistered foreigners working in Pogos.
Despite the lack of TIN, Pogo service providers must already withhold the monthly 25-percent personal income tax from their employees.
Pogos must later remit these taxes to the BIR when their workers have secured TINs
An interagency joint memorandum circular issued last July required all foreign workers to first secure visas, working permits and TINs before entering the Philippines.