Another Pogo firm shuttered

Another Pogo (Philippine offshore gaming operator) service provider was shuttered on Thursday morning for operating without paying the proper taxes covering its estimated 1,000 workers, mostly Chinese nationals.

Members of the Bureau of Internal Revenue’s (BIR) Task Force Pogo served closure orders on the two offices of Altech Innovations Business Outsourcing—its headquarters at the eighth floor of Aseana One building in Parañaque City and a branch office at the sixth floor of Double Dragon establishment in Pasay City.

Both offices are located in Entertainment City complex, a reclaimed land development west of the Manila Bay now touted as the gambling hub of the metro.

According to BIR Deputy Commissioner Arnel Guballa, Altech violated Sections 108 and 115(b) in relation to Section 236 of the National Revenue Code.

Not registered

Altech was one of the more than 200 Pogo service providers accredited by the Philippine Amusement and Gaming Corp.  (Pagcor).

But based on the investigation of the task force, Altech was found to be not registered for value-added tax purposes as certified by BIR-Parañaque.

Guballa said the Pogo firm owed the BIR an estimated P100 million, covering mostly the 25-percent withholding tax on salaries of foreign workers.

The dues may go higher, pending the company’s submission of its documents to the task force.

Unlike other delinquent gaming operators which were registered as corporations, Altech is a single proprietorship owned by a certain Jan Erick Lavariaz Altavas.

As of this reporting, Guballa could not confirm the nationality of the owner.

The Chinese employees were ordered to vacate the office premises before BIR personnel padlocked the two offices of Altech.

 Different name

Guballa noted that Altech used a different name in the building’s directory, which he surmised was the firm’s “scheme so their operation would not be easily noticed.”

BIR personnel said that Altech’s office looked like a typical call center, with the employees busy in front of their desktop computers, as well as the easy-to-go laptops and mobile phones.

Guballa said the BIR would study if Pogo firms would employ a home-based approach to running these businesses, which makes violators harder to track down.

But Altech could resume their operations immediately once they settled their tax deficiencies and complied with the BIR’s requirements.

The BIR would coordinate with the Bureau of Immigration to check whether the Chinese employees had proper work permits.

 ‘We need these revenues’

“Dapat pantay-pantay (It should be equal), Filipino or foreigner, they should be paying their taxes in the country because we need these revenues for nation building, especially for the ‘Build, build, build’ project of this administration,” Guballa said.

With the government’s campaign against tax-evading Pogos, the BIR official said, “We are expecting an increase in the number of voluntary compliance.”

“We want to tell these [Pogos and their service providers] that in the Philippines, they should comply with our tax laws para walang problema (so there won’t be any problem),” Guballa added.

Altech’s closure was done in compliance with Finance Secretary Carlos Dominguez III’s order to padlock Pogos and their service providers who neither pay correct corporate income taxes nor remit their workers’ withholding taxes.

 ‘Surprise visits’

The BIR plans to make “surprise visits” to the more than 200 Pogo service providers in the country, which the agency noted were already registered under Pagcor, but not as tax payers with the BIR.

Altech was the second Pogo firm to be closed under the Oplan Kandado program.

The first was on Sept. 25, when the BIR closed the offices of Great Empire Gaming and Amusement Corp. (Gegac) in Quezon City, Parañaque and Subic Freeport, after it failed to pay P1.3 billion in taxes.

But Gegac—the second-biggest Pogo firm employing more than 8,000 mostly Chinese workers—was back in business two days later, after paying the government an initial amount of P250 million to settle its tax obligations.

The government expects to generate P24 billion a year from the 58 registered Pogos and hundreds of their service providers, which employ around 130,000 foreign workers, mostly from China.