Crackdown on unlicensed, tax evading Pogos set

Tax authorities are priming an immediate crackdown on online gaming firms that fail to remit to the government income taxes that are supposed to be withheld from their Chinese employees— as promised by Finance Secretary Carlos Dominguez III when he reached a deal with the country’s biggest Philippine Offshore Gaming Operator (Pogo) licensee two months ago.

In a message to the press, the chief of the Duterte administration’s economic team said that the Bureau of Internal Revenue would go after these erring Pogo operators “ASAP” (as soon as possible).

“We will close down organizations that don’t withhold and remit the proper amount of taxes from their employees,” he warned, adding that this move of tightening the noose on noncompliant online gaming firms would be done together with the departments of Labor and Employment and of Justice, the Bureau of Immigration, the Office of the President and Philippine Amusement and Gaming Corp.

Sources within the legal Pogo industry—which employs almost 140,000 workers from China, mostly for their Mandarin-speaking call center and marketing operations—disclosed that the biggest online gaming firms in the country have already begun remittance income taxes since two months ago.

However, other Pogo firms that operate illegally and without the requisite license from Pagcor continued to dodge taxes, licensing fees and employ Chinese workers without the permits from immigration authorities.

Last July, these same industry sources said that legal Pogo firms would help the government crack down on fly-by-night operations that could be employing as many as 50,000 undocumented workers from China.

According to one industry official, it was now easier for authorities to stop illegal online gaming outfits after employees of firms licensed by Pagcor became fully compliant with local tax regulations.

“Once all our legal employees receive their documents from the BIR and the Bureau of Immigration, it will be easy to clamp down on unregistered operations because everyone without proper documents will be illegal,” said the official.