The Philippine government has shut down what is said to be one of the country’s biggest Philippine Offshore Gaming Operators (POGOs) over unpaid taxes. In an operation coordinated by the Bureau of Internal Revenue (BIR), government officials served on Wednesday the closure order to Great Empire Gaming and Amusement Corp, based in Quezon City, reported the Philippine government-run Philippine News Agency.
The company is said to have other offices in the country – including in Parañaque City, part of Metro Manila – which were also closed on Wednesday, added the report. Local media said that the company employed more than 8,000 people.
In comments to reporters, the deputy commissioner of the BIR, Arnel Guballa, stated that the POGO licensee should be paying value-added tax (VAT) for its operations outside the Subic Freeport Zone, where its main office is located and had been given what was termed preferential treatment. The official added that Great Empire Gaming’s offices in Quezon City and Parañaque City were not VAT-registered taxpayers.
“The period that we have given them to comply has lapsed so we have no recourse but to… close [their operations],” Mr Guballa was quoted as saying.
The official said the company would have to “settle its unpaid duties” before the closure orders against its operations could be lifted.
According to the government, POGO licensees have to be registered both with the BIR and the gaming regulator, the Philippine Amusement and Gaming Corp (Pagcor), to be able to operate legally in that country.
In a statement last week, the Philippines gaming regulator said it fully supported the country’s government “in cracking the whip” on POGOs that are delinquent in the payment of taxes.
According to Philippine legislation, the BIR – under the Department of Finance – has the authority to close down tax-evading establishments. Pagcor added in its latest statement that it had issued warning letters to all POGOs and service providers regarding this matter.
The Philippine government has established an inter-agency group that would look into the operations of POGOs to ensure that these companies pay correct taxes.
The crackdown on tax-owing POGOs comes after the government reportedly discovered that the BIR just collected a fraction of the expected PHP21.6 billion (US$413.9 million) in income taxes that should have been withheld by online gaming operators. The BIR said last month it collected about PHP200 million in income taxes from POGOs.
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