DOF probing POGOs operating without paying taxes
MANILA, Philippines — The Department of Finance (DOF) is looking into reports that some Philippine offshore gaming operators (Pogos) had reopened despite their unpaid taxes, Secretary Carlos Dominguez III said on Wednesday.
Sen. Joel Villanueva earlier said only two POGOs had complied with the government required tax payments but many more were operating, citing hundreds of nearly weekly arrests of workers for the online gaming outfits since April.
“We are conducting investigations of those allegations. It’s probably true,” Dominguez replied when asked during an online forum to comment on Villanueva’s statements.
The senator said there was really “VIP treatment” of the POGOs. “Until we are firm about them paying their taxes to the government, I don’t think they will,” he told reporters on Tuesday.
Dominguez lamented that Bureau of Internal Revenue (BIR) officers were unable to investigate due to quarantine restrictions imposed to contain the coronavirus outbreak. “But we are monitoring,” he said.
Pogos cater mostly to gamers or gamblers in China. They were banned during the lockdown, but the Inter-Agency Task Force for the Management of Emerging Infectious Diseases in May allowed them to reopen under conditions set by gambling regulator Philippine Amusement and Gaming Corp. (Pagcor).
The BIR later issued the specific tax guidelines and requirements, including health measures against the spread of the new coronavirus, before Pogo licensees, as well as service providers, could obtain clearance to restart operations.
Dominguez said the DOF had estimated that up to P20 billion a year in corporate and personal income taxes could be generated from POGOs. Last year, the government collected P6.4 billion after it ran after tax-deficient Pogos.
Dominguez said that before last year, tax collection from the POGO industry reached only about P1 billion a year.
“We know that there are [tax] leakages in Pogos especially, that’s why we have been clamping down on those leakages … We have been working on it,” he said.
POGO licensees tap service providers to be the ones that actually communicate with their clients — online gamblers outside the Philippines.
The government has been running after errant POGOs that did not remit their foreign — mostly Chinese — workers’ withholding income taxes, as well as those that did not pay corporate and franchise taxes.
As of early this year, about 60 POGOs had been issued licenses to operate by Pagcor, while 218 service providers employing more than 108,000 foreigners had registered with the BIR. Industry sources said an additional workforce roughly a fourth of the total number of foreigners are Filipinos.
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