April 17, 2019
Registered offshore gaming operators will be audited by the Bureau of Internal Revenue (BIR) to check if taxes paid to the government are correct.
“We will counter-check if their remittances were correct against the income they generated,” BIR Deputy
Commissioner Arnel Guballa told reporters late on Monday.
He did not disclose further details.
Philippine offshore gaming operators (POGOs) are a burgeoning industry, with Philippine Amusement and Gaming Corp. (Pagcor) data showing that their operations generated P657 million in 2016, P3.924
billion in 2017 and P7.365 billion in 2018.
The BIR lists 54 POGOs with gaming licenses, of which 10 are local firms and 44 headquartered offshore.
Only seven of the local operators and eight of the offshore licensees are registered with the bureau, however, despite the BIR having mandated such last September as a prerequisite for a Pagcor license.
“All foreign-based and Philippine-based operators, including those that have already been issued an offshore gaming license by Pagcor are required to register with the Bureau of Internal Revenue on or before the commencement of business; or before payment of any tax due; or before or upon filing of any applicable tax return, statement or declaration,” Revenue Memorandum Circular 78-2018 states.
The BIR has called on Pagcor to strictly enforce the registration rule amid concerns that the industry has become a conduit for undocumented workers from China.
A Finance department-led interagency task force is concurrently working to ensure that foreigners employed by POGOs are paying income taxes.
The department has estimated that the government is losing about P22 billion annually from uncollected POGO worker income taxes.
After consolidating data from various agencies, the task force has come up with an initial list of some 138,000 foreign nationals, 54,241 of whom have been given alien employment permits and another 83,760 holding special working permits.
Finance Secretary Carlos Dominguez 3rd has said those on the list have no Taxpayer Identification Numbers and that their reported salaries were only around P20,000 each per month, which he described as “ridiculously low”.
Assuming that each foreign national earns an average of $1,500 a month and is taxed at 25 percent of his or her gross income, Dominguez came up with a rough estimate of P32 billion a year in income taxes to be collected.
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