Not a single POGO can resume ops yet, as not one has fully paid tax dues — BIR
MANILA, Philippines — Not one Philippine offshore gaming operators (Pogos) nor any of their service providers has fully paid their mandatory tax obligations, two weeks after the Bureau of Internal Revenue (BIR) issued stricter rules before they can resume operations during less restrictive COVID-19 quarantine.
As such, Internal Revenue Deputy Commissioner and POGO task force head Arnel S.D. Guballa told the Inquirer on Thursday that POGOs and service providers to be found already operating were “illegal.”
Last May 6, the BIR issued the specific tax guidelines and requirements before POGO licensees, as well as service providers, can obtain clearance to restart operations.
To date, POGOs were “still in the process of complying with the requirements, including payments,” Guballa disclosed.
Thus, as far as the BIR’s records were concerned, Guballa said there must not be any one POGO sector player operating right now.
Illegally operating POGOs may be closed down by the National Bureau of Investigation (NBI) and the Philippine National Police (PNP), while local government units (LGUs) could also shut down those without business permit, Guballa warned.
Guballa noted that it would be ultimately up to POGOs when they may resume operations—the earlier they paid all tax deficiencies, the sooner they will also be granted BIR clearances.
Guballa declined to divulge BIR estimates on how much in tax liabilities these POGOs owed the government.
Earlier, Internal Revenue Commissioner Caesar R. Dulay told the Inquirer that “marami, halos lahat” or “many, almost all” POGOs had yet to settle their tax dues.
About 60 POGOs had been issued licenses to operate by the state-run regulator Philippine Amusement and Gaming Corp. (Pagcor), while 218 POGO service providers employing over 108,000 foreigners—mostly Chinese—were registered with the BIR.
POGO licensees tap service providers to directly serve their clients—online gamblers outside the Philippines, mostly in China.
The Department of Finance (DOF) had said the BIR was “making sure that POGOs and their respective service providers are properly registered and will pay the correct amount of income taxes and franchise fees to the government before they are allowed to resume operations during the quarantine period.”
“According to the set of guidelines and requirements issued by the BIR, all POGO licensees or operators should first show proof that they have already paid their 2019 franchise taxes, their withholding taxes due for the months of January to April this year, as well as the first-quarter payments of their 2020 franchise tax, before they would be given tax clearances allowing them to resume operations,” the DOF said.
POGO service providers, meanwhile, were similarly required to submit proof that they have paid their 2019 income taxes, and have remitted and paid withholding taxes for the months of January to April this year, including the 25-percent final withholding tax due from their foreign employees, before the BIR would give them tax clearances to reopen for business.
Even tax-compliant service providers “would not be issued tax clearances by the BIR should their POGO operators or licensees fail to comply with the bureau’s new requirements,” the DOF had warned.
“All POGO licensees, operators and service providers should also submit a notarized undertaking affirming their commitment to pay all tax arrears for prior years of their operations and should be registered with the respective revenue district office (RDO) having jurisdiction over their places of business,” according to the DOF.
The BIR had also required POGOs and service providers to disclose the monthly regulatory fees they paid to Pagcor during past years.
Guballa had warned that “failure to comply will result in the denial of the issuance of a BIR clearance for resumption of operations.”
Also, Guballa had said that “submission of falsified or fraudulent documents shall result in the denial” of the mandatory BIR tax clearance.
Aside from these stringent tax rules, “all POGOs and their service providers must also strictly adhere to the government’s safety and health protocols such as limited operations per shift, shuttle services for employees, regular body temperature checks and disinfection within the workplace, social distancing and wearing of masks, among other measures to prevent transmission” of COVID-19, the DOF had said.
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