GGRAsia – E-games maybe US$357mln tax harvest for Philippine govt

E-games maybe US$357mln tax harvest for Philippine govt

Sep 13, 2024 Newsdesk Latest News, Philippines, Top of the deck

The electronically-delivered games segment in the Philippines – referred to as e-Games – could contribute as much as PHP20 billion (US$356.9 million) in franchise tax this year to the country’s Bureau of Internal Revenue (BIR).

Karlo Adriano, Finance Assistant Secretary, made the observation at a Philippine Senate hearing of the Ways and Means Committee on Thursday, as reported by the Philippine Star news outlet.

According to the Electronic Gaming Licensing Department section on the website of the country’s regulator, the Philippine Amusement and Gaming Corp (Pagcor), the e-Games licensee heading includes online gaming platforms of licensed casinos, as well as bingo operations.

Last month, Pagcor said the electronically-delivered games segment had remained the industry’s best performer in terms of growth during the three months to June 30, reaching PHP30.85 billion in that quarter.

According to the report on Thursday’s Senate hearing, Mr Adriano said estimates were that the BIR could collect at least PHP15 billion and up to PHP20 billion from 5 percent franchise tax on Pagcor e-Games licensees this year.

Those figures would respectively represent an increase of 12.8 percent and 50.4 percent on last year’s franchise-tax collection from e-Games of PHP13.3 billion.

From January to July this year, PHP10.7 billion had been collected via franchise tax on e-Games.

In the Philippines, income from any gaming operation, including e-Games, is subject to a 5-percent franchise tax, payable directly to the BIR. The franchise tax is distinct from other licensing and regulatory fees payable to Pagcor.

Senator Sherwin Gatchalian, chairman of the Ways and Means Committee, was cited saying e-Games could more than make up for the lost revenues from the closure of the segment previously known as Philippine Offshore Gaming Operators (POGOs). Mr Gatchalian had been a strong critic of social harm and criminality allegedly linked to some POGO operators.

The Philippine Star cited commentary from Alejandro Tengco, Pagcor chairman and chief executive, acknowledging that land-based casinos were “going along” with e-Games “to protect their customer base” as jurisdictions around the world moved to legalise online gaming, a factor that could impact the Philippine market.

“E-games affect land-based casinos, and that’s why integrated resorts [IRs] are also going along,” Mr Tengco said.

“IRs here and abroad will not be gone because people would want to go for the personal experience. IRs are also going online to protect their customer base,” Mr Tengco reportedly said.