The Philippine House of Representatives reportedly will approve a new bill setting a 5 percent tax rate on gross gaming revenues for Philippines Offshore Gaming Operators (POGOs).
The tax rate previously was set at the tax rate of the special economic zone where each POGO was registered or the 5 percent rate, whichever was higher, according to Asia Gaming Brief.
Also according to the bill, all foreign employees of POGOs and their service providers must register for a Tax Identification Number. The measure includes a 25 percent withholding tax on those employees.
The law has been changed to prevent the Aurora Pacific Economic Zone and Freeport from issuing new POGO licenses while transferring those currently registered to the Philippine Amusement and Gaming Corp. (PAGCOR), the country’s gaming regulator.
PAGCOR noted that some 33 POGOs and 200 service providers ceased operations since the start of the pandemic; it expects the segment to generate less than half of the revenue registered in pre-pandemic years.
The House Means Ways and Means Committee said the proposed changes should raise tax revenues from POGOs by PHP13.4 billion (US $266.6 million) in its first year of implementation, and nearly PHP 177 billion in five years.
At the end of 2019, some 84 percent of POGOs were located in the National Capital Region, with 27 in Makati City, 12 in Pasay and five in Manila. According to a government estimate, over 118,000 personnel were employed in POGOs under PAGCOR licensees as of December 2019, of which over 80 percent were foreign employees.
