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The newly enacted Bayanihan to Recover as One (Bayanihan 2) law will more than double tax collection from Philippine Offshore Gaming Operators (POGO) and yield P17.5 billion in additional revenues for the government, Senate Minority Leader Franklin Drilon said on Saturday, September 12.
The Bayanihan 2 law, which extends President Rodrigo Duterte’s special powers in addressing the COVID-19 pandemic, contains a provision that excises a 5% franchise tax from the total bets received by POGOs, or from the pre-determined minimum monthly revenues from their operations – whichever is higher.
That provision, proposed as an amendment by Drilon, increases the base amount from which the franchise tax is computed, because it used to be derived from total bets minus payments for winnings.
“With his amendment, the government can now impose the 5% franchise tax on the gross bets or turnovers which will yield more revenues for the government,” Drilon said in a statement.
“The Bayanihan 2 will more than double the tax collection from POGOs – from P7 billion estimated collection in 2019 to approximately P17.5 billion this year – because of the reforms we have introduced in the measure,” added Drilon, citing estimates of the Department of Finance.
Moreover, the franchise tax will be computed based on the peso equivalent of the foreign currency used in transactions, according to the prevailing official exchange rate at the time. Drilon said this would prevent POGOs from under-declaring their income.
Failure to comply with this would amount to tax fraud, and would be considered a violation of the National Internal Revenue Code, the senator added. Bayanihan 2 authorizes the Bureau of Internal Revenue to shut down POGOs that fail to pay the right taxes.
These provisions apply to gaming operators, gaming agents, service providers, and gaming support providers.
“All revenues from POGO will be used to fund the various types of assistance laid out in the Bayanihan 2 for all sectors affected by the pandemic,” Drilon said.
Signed into law by Duterte on Friday, September 11, Bayanihan 2 provides a P165.5 billion stimulus fund for the country’s measures to respond and cope with the pandemic. Of this amount, only P140 billion is readily available. The government has yet to identify sources for the remaining P25.5 billion “standby fund.”
If it becomes available, this standby fund will be used to procure vaccines or medication for COVID-19, and for low-interest loans for businesses hit hard by the pandemic. – Rappler.com
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