Revenue collected from POGOS to contract by 45.37% this year

THE national government expects collections from offshore gaming businesses operating in the Philippines could contract by over 45 percent this year, according to the Bureau of Internal Revenue (BIR).

In a presentation at the Senate Committee on Ways and Means on Thursday, BIR Deputy Commissioner Arnel SD. Guballa said the projection is based on the January 2021 collection data.

Guballa said revenue collections from Philippine Offshore Gaming Operators (POGOS) only reached P327.2 million in January 2021, a 68.63-percent contraction or a decrease of P715.9 million from the P1.43 billion posted in the same period last year.

“The amount is based on the January actual collections of P327.2 million multiplied by 12 months,” Guballa said in a presentation.

The BIR official explained that with this computation, total POGO tax collections could only reach P3.92 billion or 45.37-percent lower than the total collections obtained from these businesses last year.

Earlier, the BIR reported that POGO tax collections reached P7.18 billion in 2020 amid the impact of lockdown measures to contain the Covid-19 pandemic.

BIR said in a statement its collections from POGOS continued to increase from P2.36 billion in 2018. It grew by 172.43 percent in 2019 and by 11.71 percent in 2020, the statement added.

In May last year, the government allowed some POGOS to operate while several parts of the country remained under strict lockdown. POGOS deemed not tax-compliant were prohibited from resuming operations.

Executives behind POGOS have insisted they are not liable to pay the 5-percent franchise tax since they are an offshore business. They gained a solid footing from a temporary restraining order (TRO) issued by the Supreme Court early this month.

The TRO effectively stopped the government from imposing the 5-percent franchise tax on the gross bets from gaming operations of POGOS as mandated under Republic Act 11494.

The high court said, in striking down the franchise tax, that it was simply a “rider” in Republic Act 11494, or the Bayanihan 2, and thus, illegal.