Philippine President Rodrigo Duterte has authorized legislation that will increase the tax on Philippine Offshore Gaming Operators (POGOs) and top up the country’s Covid-19 relief fund.
Under the so-called Bayanihan to Recover As One Act, all “offshore gaming licensees, including gaming operators, gaming agents, service providers and gaming support providers” would be subject to a 5 percent tax on turnover rather than revenue. Money owned will be calculated on the peso equivalent of any foreign currency used based on the official exchange rate at time of payment to ensure POGOs can’t under-declare their income.”
House Minority leader Franklin Drilon told local radio station DWIZ that “Bayanihan 2” will “more than double the tax collection from POGO,” from Php7 billion (US$144.5 million) in 2019 to Php17.5 billion (US$361.2 million) this year “because of the reforms we have introduced in the measure,” with revenues going to “all sectors affected by the pandemic.”
The 5 percent franchise tax will be applied to either the gross bets or turnovers or pre-determined minimum monthly revenues from gaming operations, whichever is higher, according to CalvinAyre.com. POGOs that fail to comply will be stripped of their licenses by the Philippine Amusement and Gaming Corp. (PAGCOR).
Only 29 of 60 official POGOs licensees having been granted permission to resume operations. PAGCOR and the Bureau of Internal Revenue announced in early May that all POGOs and their service providers must settle any outstanding tax liabilities, license fees, performance bonds or penalties owed to PAGCOR, and remit all regulatory fees.
POGO operators have a checkered history in the Philippines, with some operators in arrears on their taxes, and allegations that others have recruited illegal foreign workers and forced them to live and work in cramped, unsuitable environments. Some residents and lawmakers have also expressed concerns about the transient workforce bringing crime to the Manila area.
