“TF POGO is toothless,” said ACT-CIS partylist Rep. Eric Go Yap, who chairs the House committee on games and amusements.
POGO task force toothless — lawmaker
Artemio Dumlao (The Philippine Star) - February 22, 2020 - 12:00am

BAGUIO CITY, Philippines  – The government is toothless against erring Philippine offshore gaming operators (POGOs) in the country, even with the newly created interagency task force, a lawmaker said yesterday.

“TF POGO is toothless,” said ACT-CIS partylist Rep. Eric Go Yap, who chairs the House committee on games and amusements.

As if to dispute this claim, however, the Bureau of Internal Revenue announced yesterday that the BIR had shut down a POGO firm in Pasay City for its failure to remit millions in franchise taxes.

The task force, formed last year, has the Department of Finance, through the BIR, working closely with agencies like the Bureau of Immigration, which issues short-term special work permits to mostly Chinese workers; the Department of Labor and Employment, from which they secure alien employment permits; the Department of Foreign Affairs, which grants the visas to the foreign nationals; the Philippine Amusement and Gaming Corp., which has the list of licensed POGOs; the Department of Trade and Industry, which oversees special economic zones where many POGOs operate; and the Securities and Exchange Commission, where POGO agents register.

However, Yap said the interagency effort working as a single apparatus is much wanting.

While the crackdown on erring POGOs in 2019 resulted in an increase in tax collections from the industry by 169 percent or P4.04 billion, the task force admitted it has yet to complete its list of foreign POGO workers in the country.

The DOF said the task force’s goal is to collect an estimated P22 billion or more in annual income taxes from these foreign workers.

Speaking on the sidelines of his visit in Benguet, where he was appointed as caretaker congressman, Yap was a picture of frustration over how shortchanged the government has been with the questionable operation of many POGOs.

“The government is even blind about these (illegal operation of) POGOs,” he said, adding that he had been expecting from the task force “a convergence of strategies in curbing the violations and other recent issues hounding POGOs.”

His committee has invited for the second time BIR officials or representatives to shed light on the revenue collection from POGOs after the agency’s “snub” of the first House committee invitation.

“They (BIR officials) have to come and enlighten the country,” said Yap as he underscored that billions worth of uncollected revenue from POGOs should have gone to funding essential programs and projects for nation-building.

“We must fix this to seize the advantages these bring to the Philippine economy and the country’s fiscal health,” he said.

Yap also warned that if officials invited by his committee do not appear to explain themselves, he may be forced to cite them for contempt.  

Abra Rep. JB Bernos, vice chairman of the committee, said the government’s regulatory powers must be exercised to curb these offshore gaming entities.

BIR shuts down POGO in Pasay

BIR deputy commissioner Arnel Guballa announced yesterday that the bureau had closed down a POGO firm for allegedly failing to register and remit P114 million in franchise taxes for 2019, inclusive of incremental penalties.

Guballa said Synchronization Anywhere For You Inc. (SAYFI), located on Macapagal Avenue, Mall of Asia Complex, Pasay City, is registered with Pagcor, but not with the BIR.

“This is a domestic licensee which we want to (charge) with the five percent franchise tax. This is in lieu of all taxes,” Guballa said.

This is the first time that the BIR has shut down the operations of a POGO licensee. Previously, the BIR conducted enforcement activities against service providers of offshore gaming firms.

Pursuant to Presidential Decree 1869, casino franchise holders are subject to a five percent franchise tax on their gross gaming revenue, in lieu of all taxes.

Currently, there are 60 Pagcor-licensed POGOs.

Guballa said most POGO licensees are based overseas, making it difficult for the BIR to collect taxes as they question the Philippines’ jurisdiction over them.

“But this one is domestic, it’s not foreign-based,” the BIR official clarified.

Bill to tax POGOs

To settle this gray area, Guballa said Congress is now pushing for a bill that will clarify the taxability of POGOs.

Under the bill filed by Senate President Pro-Tempore Ralph Recto, licensed Philippine-based POGOs, local gaming agents and service providers shall be subjected to a 30 percent income tax.

The taxable amount will be derived in the preceding taxable year from all sources within and outside of the Philippines.

It also proposed for foreign-based POGOs to be subjected to a 30 percent income tax based on their gross income derived from game offerings or facilities located within the Philippines.

On top of the 30 percent income tax, the bill also proposed the imposition of a five-percent franchise tax on all gross receipts derived from gaming operations of both Philippine-based and foreign-based POGO operators .– With Mary Grace Padin

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