Philippine leader President Rodrigo Duterte (pictured in a file photo), has signed into law a measure imposing additional taxes relating to the operation of Philippine Offshore Gaming Operators (POGOs), the presidential palace said on Thursday.
The law also clarifies the applicable tax compliance requirements and tax regime for POGOs. It states that a 5-percent tax on gross gaming revenues (GGR) applies to offshore gaming licensees. That is in lieu of all other direct and indirect internal revenue taxes and local taxes, with respect to gaming income.
The Philippine Amusement and Gaming Corporation (Pagcor) or any special economic zone authority or tourism zone authority or freeport authority may also impose regulatory fees on offshore gaming licensees which should not cumulatively exceed 2 percent of the gross gaming revenue or receipts, reported the official Philippine News Agency.
POGOs, based onshore or offshore, are entities licensed by Pagcor to provide and participate in offshore gaming services. In the case of offshore or foreign-based POGOs, they are licensed to engage the services of PAGCOR-accredited service providers for online gaming activities.
Accredited service providers to offshore gaming licensees will not be subject to the 5-percent gaming tax, according to the Philippine News Agency. But they will pay a similar rate of tax on receipts derived from their gaming operations, and will be subject to all other applicable local and national taxes.
Collecting the Philippine authorities’ share of money generated by POGOs has proven problematic in the past.
The Philippine Amusement and Gaming Corp, the country’s gaming regulator, said earlier this month that nearly PHP1.37 billion (US$27.3 million) in past due receivables from POGOs “remains unresolved due to the unsettled protests” filed by some of the licensees.
The new law – Republic Act 11590 – says foreign nationals employed by offshore gaming licensees and service providers will have to pay a final withholding tax of 25 percent on their gross income.
The new statute also makes POGO employees liable for a minimum final withholding tax of PHP12,500 for any taxable month.
All offshore gaming licensees and providers who employ foreign nationals will face a fine of PHP20,000 for every such person that does not have a Philippine tax identification number.
Presidential spokesperson Harry Roque said that under the new act, around 60 percent of the total revenue collected from POGOs would be allocated for the implementation of the Universal Health Care Act.
Mr Roque said about 20 percent of the revenue will be allotted for health facility improvements, while the remaining 20 percent would be for sustainable development goals under the National Economic and Development Authority.
The Philippine government is expected to collect PHP32 billion in revenues from POGOs in 2022, based on the new tax regime.
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