Pagcor warns POGO to pay proper taxes

MANILA, Philippines — The Philippine Amusement and Gaming Corp. (PAGCOR) has warned offshore gaming operators to comply with government regulations and pay proper taxes, especially with the government intensifying its monitoring and enforcement measures.

Jose Tria Jr., PAGCOR’s Philippine Offshore Gaming Operators (POGO) vice president, issued the warning against erring online gaming firms and informed them that concerned government agencies are closely monitoring how they conduct business in the country.

“Let this serve as a final warning for everyone to strictly comply with all the rules, regulations and directives of all other government agencies which may have jurisdiction over the other aspects of your operations,” said Tria, referring to applications for the necessary visas or permits of their employees and payment of taxes and other fees, among others.

“Finally, for those under-declaring the income tax of their employees, be sternly warned that you will be placed under strict scrutiny by the Bureau of Internal Revenue (BIR) for such actions. The practice of declaring income tax below industry standards will not be tolerated by the BIR and will be dealt accordingly,” he added.

Tria, who is also the concurrent special assistant to the PAGCOR chairman, urged POGO to approach the agency should they need any clarification on existing regulations. 

Last Feb. 19, PAGCOR issued a directive which orders POGO to submit lists containing the names of all their employees, with the corresponding salaries and visa status.

During an inter-agency meeting held recently, Victor Padilla, senior manager of PAGCOR’s Policy Division, Offshore Gaming Licensing Department, said penalties and demerits would be issued to offshore gaming firms that have yet to submit the lists of their respective foreign workers.

He said PAGCOR would seize the operations of those that remain non-compliant despite repeated warnings.

Currently, the Department of Labor and Employment (DOLE), Bureau of Immigration (BI), PAGCOR and BIR are reconciling the list of foreign workers in the offshore gaming industry in the country.

Initially, DOLE and BI came up with a list of 138,001 workers, of which 54,241 were issued alien employment permits and another 83,760 granted special working permits.

PAGCOR has also submitted to the BIR a list of 126 out of 205 POGO, which employ a total of 53,239 foreign workers with an average salary of about P41,000 each.

Industry sources say regular workers manning call center operations and chat rooms are paid average monthy salaries of P40,000 to P50,000, while supervisors and managers earn up to P75,000 and P100,000, respectively.

The BIR said it is also auditing the income taxes that were withheld and remitted by online gaming companies for their foreign workers to check if there are discrepancies.

As of May, the BIR has determined tax deficiencies amounting to P4.44 billion from erring online gaming service providers.

Estimates from the Department of Finance showed that the government still stands to collect P32 billion in income taxes annually from some 138,000 foreign workers, particularly in the POGO industry.