GGRAsia – Tax-owing POGOs face closure, says Philippine govt

Tax-owing POGOs face closure, says Philippine govt

Sep 17, 2019 Newsdesk Latest News, Philippines, Top of the deck

The Philippines gaming regulator says it fully supports the country’s government “in cracking the whip” on Philippine Offshore Gaming Operators (POGOs) that are delinquent in the payment of taxes.

In a Monday written statement, the Philippine Amusement and Gaming Corp (Pagcor) said the country’s Bureau of Internal Revenue (BIR), under the Department of Finance, has the authority to close down tax-evading establishments. Pagcor added that it had issued warning letters to all POGOs and service providers regarding this matter.

Pagcor’s statement followed remarks made by the Philippine Finance Secretary Carlos Dominguez over the weekend. Mr Dominguez stated that the national government was not satisfied with the lower tax income collected from online gaming operators.

“[We will] close down organisations that don’t withhold and remit the proper amount taxes from their employees,” Mr Dominguez said in a Sunday statement to local media outlets.

The official confirmed the order after finding out that the BIR just collected a fraction of the expected PHP21.6 billion (US$412.9 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.

In Monday’s statement, Pagcor said that it might take several measures to punish POGOs that do not pay their tax dues. Such measures include: the imposition of interest on outstanding arrears; forfeiture of performance bond; imposition of demerits/administrative sanctions and charging of cash penalty; cancellation of licence and endorsement to legal division for proper collection efforts.

The Philippine online gaming industry employs mostly Chinese workers. It is said to be catering mainly to gamblers from mainland China.

The Chinese government has asked the Philippines to ban online gaming, but President Rodrigo Duterte said the country needs the industry. Mr Duterte pointed out the importance of the online gambling industry as a job provider in the Philippines and as a tax revenue generator for the government.

In August, Pagcor said it stopped accepting applications for POGO licences following concerns over the rapid expansion of the industry.

In Monday’s announcement, the gaming regulator said that while it would ensure that the government “gets its proper and legal taxes” from existing operators, “the moratorium on the issuance of licences to new POGO applicants … continues”.