The Philippine Offshore Gambling Operator (POGO) brings a new tax plan up for discussion as the industry is already receiving plenty of pressure from the government to clean up their industry, including paying the taxes they already owe. Now, a new POGO tax plan from Albay Representative Joey Salceda has been filed with the House of Representatives, adding a new potential burden to operators.
GMA reports Albay representative, Joey Salceda, has recently filed an extension to the House Bill 5267 seeks to clarify what taxes should be imposed on POGO employees, since they are practicing business in the country.
“As POGOs are companies doing business in the Philippines, their employees’ income shall be subject to tax.”
Beyond the income taxes that POGO employees are already expected to pay, Salceda is of the belief that POGO employees need a specific tax code applied to them. He remains convinced POGO employees need a specific tax code applied to them individually.
Salceda further addss:
“Codifying the tax regime for POGOs will provide the government a broader set of levers with which to monitor and oversee the industry and to stabilize the gyrations in tax revenue intake and enforcement.”
Tax Rate extension
Salceda received full support from the Department of Finance Secretary, Carlos Dominguez one week before presenting the new tax bill. However, he agreed on the framework without having a second opinion or knowing all the details of the newly presented bill. This step reminds of recent events from September when China urged the Philippines to entirely ban online gambling.
It requires a 15% tax on the salaries, wages, annuities, compensation, remuneration and other benefits for the employees, including honoraria or allowances. Likewise, the bill requires an additional 5% tax on gross receipts, demanded by the Bureau of Internal Revenue.
Industry growth in the Philippines has already been severely damaged thanks to new pressures and outgoing tax collection. Now with $390 million in unpaid taxes, it is likely that operators will choose to leave than pay up, leading to a complete standstill of the sector.
Representative Bienvenido Abante Jr. said.
“The inquiry is long overdue given the issues that have surfaced regarding the POGO industry. The fact that we cannot accurately account for these workers is troubling.”
Altech Back in Business
Among the raided operators for not paying full tax bills was Altech, now entirely back on track. AIBC paid out a minor fine in the range of $160,000 to BIR and agreed to cash out the remainder of $720,000 in monthly installments.
It is exactly a bill like 5267 that operators will be required to pay, once calculated how much money the employees had failed to shell out in income taxes. Arnel Guballa, BIR deputy chief says that besides is the VAT bill to reimburse as well. Further he stated that the Bureau needs stronger manpower to speed up the process.
This November Representative Eric Go Yap has also announced a briefing with PAGCOR, which is to assist with tackling current POGO issues. If the new bill is approved, the state will impose a gambling tax of $10,000 per table for live betting operations and $5,000 for RNG games.