BIR tightens watch over POGOs

MANILA, Philippines — The Bureau of Internal Revenue (BIR) will start looking into the tax compliance of offshore gaming licensees (OGLs) and will begin closing down firms found violating the new regulations.

Under Revenue Regulations (RR) 20-2021, the BIR has listed nonregistration, nonpayment and underpayment as fraudulent acts that may be committed by OGLs in compliance with Republic Act (RA) 11590, which taxes the activities of Philippine offshore gaming operators (POGOs).

Likewise, the BIR has warned that it would shut down OGLs, gaming agents and service providers found evading their tax obligations payable to the government.

In enforcing a closure order, the BIR will also padlock the operations of service providers should their OGL clients be charged with violations against the tax code.

Foreign nationals involved in the fraudulent act may be slapped with deportation and even blacklisting.

The BIR will also punish OGLs found employing foreign nationals without valid tax identification number registered with the government. For every foreign worker discovered without TIN, the agency will demand a fine of P20,000 and require their TIN registration.

The BIR may also recommend to concerned agencies the termination of licenses obtained by OGLs or their perpetual or temporary ban for continuous hiring of unregistered foreign workers.

Penalties will be imposed by the BIR against OGLs that fail to submit a summary list and status updates on foreign nationals employed forms, mandating them to comply with the requirement even after they have paid the fine.

The RR issued by the BIR also instructs OGLs to provide their true and correct address, or they will be considered unregistered with the government and will be made to pay fines.

In September, President Duterte approved RA 11590 mandating POGOs to pay a gaming tax of five percent of their gross income. The law also authorizes state-run Philippine Amusement and Gaming Corp. and economic zone regulators to collect regulatory fees of up to two percent from their licensees.

It also orders foreign workers in POGOs to remit a withholding tax of 25 percent on their gross salary. As laid out by the BIR’s RR, the law requires that penalties be enforced on POGOs found violating the provisions.

According to Finance Secretary Carlos Dominguez, the government expects to collect more than P76 billion in revenues from POGOs.