Gov’t promises to be stricter going after POGO taxes

MANILA, Philippines – Philippine offshore gaming operators (POGOs) will have to pay the correct taxes before they are allowed to resume operations during the quarantine period, the Department of Finance (DOF) said on Saturday, May 9.

The DOF said in a statement that this is part of the Bureau of Internal Revenue’s (BIR) set of “strict” rules on the reopening of POGOs and their service providers.

“The Bureau of Internal Revenue (BIR) is making sure that Philippine Offshore Gaming Operators (POGOs) and their respective service providers are properly registered and will pay the correct amount of income taxes and franchise fees to the government before they are allowed to resume operations during the quarantine period,” the DOF said.

One requirement is that POGO licensees and operators should show proof that they have settled all their 2019 tax obligations, including franchise taxes.

The BIR also said POGOs must have already paid their withholding taxes for January to April 2020, as well as first quarter payments for 2020 franchise tax.

The same is required for POGO service providers, including that they should have already paid the 25% final withholding tax due from their foreign employees.

“Tax compliant POGO service providers would not be issued tax clearances by the BIR should their POGO operators or licensees fail to comply with the bureau’s new requirements,” the DOF said.

The DOF also also said POGOs and their service providers are required to observe safety and health protocols set by the government to prevent the spread of the coronavirus.

Under the Guidelines & Requirements  issued by the BIR’s POGO Task Force headed by Revenue Deputy Commissioner Arnel Guballa, “failure to comply with any of the (requirements) will result in the denial of the issuance of a BIR Clearance for resumption of operations.”

POGOs and their service providers must also “strictly adhere to the government’s safety and health protocols such as limited operations per shift, shuttle services for employees, regular body temperature checks and disinfection within the workplace, social distancing and wearing of masks, among other measures to prevent transmission of the novel coronavirus,” the DOF said.

The BIR guidelines were issued on May 6.

The Accredited Service Providers Association of PAGCOR (ASPAP), an organization of POGO service providers, said in a statement on Saturday that the government has its “unequivocal commitment to settle the appropriate tax liabilities.”

“However, just like any legitimate business venture, our association is hopeful that the concerned agencies shall be able to roll out a more clear-cut guidelines and regulations on taxation which will be referenced by the industry in its forecasts and financial plans,” the ASPAP said.

The reopening of POGOs amid the pandemic triggered public uproar, counting lawmakers among its critics. Senate investigations earlier this year exposed POGOs’ links to crimes.

Under existing laws, there is no prohibition against POGOs, only statutes that ban the so-called poor man’s gambling like jueteng, jai alai, cara y cruz (heads or tails), and the like.

Senator Joel Villanueva had earlier also warned that POGOs have “a huge potential of spreading the [coronavirus] disease because there are several workers working an enclosed area and are residing in high rise condominiums.” – Rappler.com