Pagcor bucks lobby for POGO tax perks in economic zones

MANILA, Philippines—The country’s gaming regulator is opposed to efforts to provide additional perks for online gaming firms based in tax-shielded special economic zones, saying instead that all Philippine offshore gaming operations, or POGOs, should be treated uniformly.

In an interview, Philippine Amusement and Gaming Corp. (Pagcor) chair and CEO Andrea Domingo said the government’s casino regulator is batting for a level playing field in the online gaming industry regardless of where these firms operate from.

“Special means special,” she said. “In government there shall be no such thing. All policies, regulations and laws should be uniformly applied.”

Her statement followed reports that the bill seeking to regulate POGOs — most notably through the imposition of a unified tax system — is being stalled in Congress due to lobbying to include provisions that would restore tax advantages to special economic zones.

The POGO bill, meant to end the controversy over the taxation of the online gaming industry, was completed in the House of Representatives last February and the Senate last June.

The House leadership agreed to adopt the Senate’s version to skip the reconciliation process through the bicameral conference committee.

House Ways and Means chair Rep. Jose Sarte Salceda said he recommended the adoption of the Senate version because of government’s urgent need to raise P13.4 billion from POGOs to boost state coffers during the ongoing pandemic.

At present, the POGO bill has yet to be ratified by Congress despite commitments by House leaders and President Rodrigo Duterte’s move certifying the proposed tax on POGOs as an urgent measure.

The Pagcor chief said she also supports the POGO tax bill, saying the regulator evaluated the measure and determined that the proposed tax scheme is the proper way of settling the long running issue.

Domingo supports the Senate version which directs the revenues to be raised for the public health care system, saying the measure is “fair and good” for the government, the public and gaming firms.

Salceda said the Senate version contains “only minor reworkings” of the House version, and is faithful to the Senate’s proposed tax rates and bases.

“We were the first draft, and they made very few modifications,” he said. “Recognizing the respect that the Senate extended to the House version, we will adopt their changes, which in my view are acceptable.”

Once enacted by the President into law, the Bureau of Internal Revenue will impose a 5 percent tax on gross gaming receipts for offshore gaming licensees and a 25 percent tax on gross income for nonresident aliens working for POGO service providers.

The government will also impose a 25-percent withholding tax on foreigners employed by offshore gambling licensees and service providers. A minimum final withholding tax of P12,500 for any taxable month is also mandated.

The measure will also require the industry’s non-Filipino employees to obtain tax identification numbers from the government.

TSB