BIR issues guidelines for POGO resumption

MANILA, Philippines — The Bureau of Internal Revenue (BIR) has issued guidelines for the reopening of Philippine offshore gaming operators (POGOs) and their service providers, wherein only tax-compliant firms would be able to partially resume operations.

In a statement, the Department of Finance (DOF) said the BIR is making sure that POGOs and their respective service providers are properly registered and paying the right taxes and fees before they are allowed to resume operations during the quarantine period.

Based on the guidelines issued by the BIR POGO Task Force as contained in Revenue Memorandum Circular No. 46-2020, POGO licensees and operators should first show proof that they have paid their franchise taxes for 2019 and the first quarter of 2020 before they can be granted clearance to reopen their business.

They should also show evidence of paying their withholding taxes due for the months of January to April this year.

POGO service providers are likewise required to submit proof that they have paid their income taxes for 2019. They should also have remitted their withholding taxes from January to April this year, including the 25-percent final withholding tax from their foreign employees.

All licensees, operators and service providers should also submit a notarized undertaking affirming their commitment to pay all tax arrears from prior years.

Furthermore, they should be registered with their respective Revenue District Office.

“Failure to comply with any of the (requirements) will result in the denial of the issuance of a BIR clearance for resumption of operations,” the BIR said.

The bureau also noted that service providers would not be issued tax clearances by the BIR should their POGO operator fail to comply with the requirements.

In addition, the BIR’s guidelines also listed the documents and forms required to be submitted for the application of tax clearances.

POGOs were allowed to resume partial operations following the relaxation of quarantine rules in some areas.

Despite being re-classified as business process outsourcing (BPO) companies, POGOs and their service providers are not eligible for tax breaks and should therefore still pay their taxes, according to the DOF, BIR and the Philippine Amusement and Gaming Corp. (Pagcor).

Finance Secretary Carlos Dominguez III earlier emphasized that no POGO operator or service provider would be allowed to operate again “unless they are compliant with all government laws and regulations, including, but not limited to, those involving health and taxation.”

Aside from securing a clearance from the BIR, POGOs and their service providers are also required to strictly adhere to the government’s safety and health protocols, such as limited operations per shift, provision of shuttle services for employees, regular body temperature checks and disinfection within the workplace, social distancing and wearing of masks and other measures to prevent transmission of the coronavirus disease 2019.

Rep. Joey Salceda said on Monday Pagcor should issue Gaming Employment License or GEL IDs to POGO workers if the Chinese-dominated online gaming industry would really eventually reopen.

Salceda, chairman of the House ways and means committee, said the resumption of POGO operations can provide the government with much needed cash to address the COVID-19 pandemic.

The Albay lawmaker expressed belief POGOs should be allowed to operate again “because they’re not illegal.”

“The question at hand is, if the premise is government revenue, how do we get more out of the industry?”

Issuing GEL IDs to every POGO worker, he said, would help the government determine which POGOs are legitimate and thus are capable of paying proper taxes.

Salceda, co-chairman of the Economic Stimulus Cluster of the Defeat COVID-19 Committee (DCC) told reporters through Viber that each GEL ID must contain the worker’s taxpayer identification number (TIN) and BIR work permit number, among other key details. 

He added that POGO employees –  a majority of whom are Chinese – must show “certification that they went through a cultural seminar wherein they will be taught how to behave in the Philippines.”

“They shouldn’t be disrespectful,” he noted, alluding to rowdy behavior displayed by many foreign POGO workers.

Over the weekend, Salceda estimated that the monthly tax take from POGOs could reach as high as P2 billion if they are allowed to resume operations.

The enforcement of enhanced community quarantine (ECQ) beginning March 17 has disrupted operations of POGOs and other industries.

In response to warning that POGO operations might further spread COVID-19, Salceda said POGO employers should ensure that their workers undergo testing for the disease. 

“Each POGO employer needs to submit a clearance that employees went through testing and that they are COVID-free,” he said.

Ang Probinsyano Party-List Rep. Ronnie Ong, a vice-chair of the House committee on games and amusements, bared last December that Pagcor was supposed to roll out GEL IDs in January 2020.