POGOs must pay all taxes from April and earlier before reopening – BIR

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Metro Manila (CNN Philippines, May 8) – Philippine offshore gaming operators or POGOs as well as service providers must pay all taxes for April 2020 and earlier before they are allowed to reopen, the Bureau of Internal Revenue said.

Revenue Memorandum Circular 46-2020 signed Thursday sets the tax requirements for all POGOs seeking to resume partial operations, days after Malacañang confirmed that these businesses can start letting 30 percent of their workforce back to their offices. 

POGOs have been required to pay their tax dues now even if all other taxpayers were given until June 14 to submit their 2019 tax returns.

The government allowed POGOs to resume operations starting May 1, subject to requirements such as testing for all workers for COVID-19 before being cleared to work and the practice of social distancing in offices.

Presidential Spokesperson Harry Roque, Jr. argued amid criticisms against the reopening of POGOs that they are considered as business process outsourcing firms even if they cater to the gambling industry -- a claim rejected by the BPO industry's umbrella association. Roque earlier said that POGOs are an important "cash resource" for the President and the government.

READ: POGOs are not BPO firms, industry group says

All 60 licensees as well as hundreds of service providers must secure a tax clearance from BIR's POGO Task Force, Philippine Amusement and Gaming Corporation chair Andrea Domingo said last week, as she explained that POGOs can be considered an "essential" sector.

To qualify, POGO license holders should be registered with the revenue district office covering their work location, submit copies of the franchise tax quarterly returns for 2019 and first quarter 2020, remit and pay withholding taxes for January-April, and submit a notarized undertaking "to pay all tax arrears for prior years."

"Failure to comply with any of the above will result in the denial of the issuance of a BIR clearance for resumption of operations," the order read.

For service providers – or third-party firms contracted for POGO-related activities – they should also submit copies of their 2019 income tax return and remit and pay the withholding taxes of all employees, including the 25 percent duty deducted from the salaries of foreign workers.

"Please note that the application of a service provider for the issuance of a BIR clearance shall not be approved in case its POGO licensee failed to comply with the BIR requirements for BIR clearance," read the circular issued by Deputy Commissioner and Head of POGO Task Force Arnel Guballa.

These firms must send via e-mail documents such as the company name, tax identification number or TIN, business addresses, authorized representatives, and their contact details so they can be tracked down by authorities as needed.

The Philippines has stopped granting new licenses to operators since late 2019 due to various issues on tax payments, security, visa issuances, and rising crimes raised against the sector, particularly Chinese employees who form bulk of its labor force.

RELATED: Racism vs Chinese workers prompt some POGO firms to leave PH – Pagcor

Under new quarantine guidelines, establishments catering to amusement and entertainment are banned from reopening. Still, there were at least two raids done by authorities on illegal gambling operations in Metro Manila while under lockdown.