Duterte enacts law taxing POGOs

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Metro Manila (CNN Philippines, September 23) —  President Rodrigo Duterte enacted on Wednesday a law to tax offshore gaming operations, presidential spokesperson Harry Roque said Thursday.

Republic Act 11590 amended some sections of the National Internal Revenue Code to better collect taxes from Philippine Offshore Gaming Operations (POGOs).

Its salient provisions are:

— imposing a 5% gaming tax on services rendered by POGOs, in addition to a 2% regulatory fee that may be imposed by the Philippine Amusement and Gaming Corporation (Pagcor) and economic, tourism, or freeport authorities;

— requiring foreign employees of offshore gaming operators to obtain a tax identification number (TIN). POGOs shall be fined ₱20,000 for every foreigner without TIN and possible revocation of other licenses;

— imposing a 25% withholding tax and minimum final withholding tax of ₱12,500 for any month on foreign employees; and

— apportioning revenue from POGOs to the following: 60% for the implementation of Universal Health Care Law; 20% for the health facilities enhancement program; and 20% for the attainment of sustainable development goals;

Duterte certified the measure as urgent in May in a bid to shore up revenues. The government expects a windfall of over ₱120 billion over the next four years.

In 2016, Pagcor released rules and regulations on POGOs, while the Bureau of Internal Revenue (BIR) issued a memorandum circular in 2017 that set applicable taxes on offshore gaming operations.

BIR data showed collection from POGOs in 2020 amounted to ₱7.18 billion, around 11% higher than the ₱6.42 billion collected in 2019.