Recto backs DOF plan to tax Chinese POGO workers

MANILA, Philippines —  The Senate is backing a government plan to run after tens of thousands of Chinese workers in the country who have not been paying income tax as the Bureau of Internal Revenue (BIR) targets to collect at least P22 billion a year in income taxes from Chinese and other foreign nationals employed in the booming Philippine offshore gaming operations or POGOs.

A preliminary BIR count covering 64 out of 205 service providers of POGOs showed these employed 33,000 foreign workers, raising the possibility that the number of alien workers in the industry could be more than 100,000.

At a monthly pay of P78,000 – the rate advertised by recruiters in Chinese newspapers – the income tax due per worker is in the range of P18,000 a month, a BIR computation showed.

Senate President Pro Tempore Ralph Recto said there should be no “great wall” that protects imported Chinese labor from paying a tax on income earned in the Philippines.

Recto said the finance department’s ultimatum to both “Chinese employees and employers” to obey the tax laws of the land is the right way to raise revenue “because government must first collect taxes properly before raising them.”

“That’s the right approach. Before you badger Congress to levy new taxes or raise rates, kindly plug the leaks first,” he said.

Recto said Filipino workers and professionals paid P370 billion in income tax in 2017, representing 20 percent of tax paid. “For every P5 tax paid, P1 comes from individual income earners.”

“The BIR can’t be strict on Filipinos when it comes to paying taxes, by withholding these at source, while allowing foreign nationals a free pass,” he said.

Recto said “the tax net must capture not only taxes evaded by Chinese workers in the country’s online gaming business, but in other industries as well, such as construction.”               – With Paolo Romero