₱6.42-B taxes seized from erring POGOs in 2019

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Metro Manila (CNN Philippines, January 26) – The government collected ₱6.42 billion in total taxes from Philippine offshore gaming operators (POGOs) and their service providers in 2019, the Department of Finance (DOF) said over the weekend.

This amount was ₱4.04 billion or 169 percent more than the collected ₱2.38 billion worth of tax payments by POGOs in 2018, the DOF said in a statement Sunday.

In 2019, the BIR collected ₱5.13 billion in withholding taxes, ₱644.07 million in income taxes, ₱91.13 million in value-added taxes (VAT) and percentage taxes, ₱81.11 million in documentary stamp taxes and ₱469.13 million in other taxes from POGOs.

Citing data from Philippine Amusement and Gaming Corp. (Pagcor), the Department of Labor and Employment, and the Bureau of Immigration, the Bureau of Internal Revenue (BIR) said that about 108,914 individuals were employed by 218 POGO service providers in the country.

The BIR issued 170 notices to collect P27.35 billion in tax liabilities from errant POGOs.

In March 2019, Finance Secretary Carlos Dominguez III convened members of an interagency task force consisting of the three agencies, along with the Philippine Amusement and Gaming Corp., Securities and Exchange Commission and the special economic zones that host online gaming corporations.

Joint Memorandum Circular 001 series of 2019 was also issued to mobilize government agencies to run after tax-evading foreign workers and require them to secure taxpayer identification numbers (TINs) before they are given work permits.

The Great Empire Gaming and Amusement Corp. (GEGAC) was the first POGO service provider shut down by the BIR under its “Oplan Kandado” program for failing to register for VAT purposes, which is a violation of Section 108 in relation to Section 115 of the National Internal Revenue Code (NIRC). Its satellite offices in Paranaque City and Subic Freeport were also padlocked by the BIR.

In October, the BIR also padlocked the head office of Altech Innovations Business Outsourcing in Paranaque City and its branch in Pasay City, for the firm's failure to register as a VAT taxpayer.

The firm reopened after paying an initial P8.2 million in back taxes and committing to pay the remaining P37 million it owes the government for unremitted withholding taxes of its 390 mostly Chinese workers.

Before 2019 ended, the BIR cracked down on the country’s biggest POGO service provider – New Oriental Club 88 Corporation – which was registered as a business providing customers relations services.

According to BIR estimates, the company employed about 23,000 foreign nationals for the taxable year ending Dec. 31, 2018. But the company submitted to the BIR an official list of just 6,736 foreign workers.

Last January 17, the BIR closed down the Pasig City branch of Xpoint Technology Philippines Corp. after it was learned that the company was not registered for tax payments. The firm operated at the Ortigas Center even if its main office was located at the Cagayan Special Economic Zone and Freeport.

In November, the House Committee on Ways and Means approved House Bill 5267 proposed by its chairman Albay 2nd District Representative Joey Salceda that imposes a uniform tax rate for POGOs.

Salceda noted that the measure will potentially generate ₱45 billion worth of revenues for the government every year.

READ: House panel approves bill setting 5% tax on POGOs