Senate greenlights POGO tax regime
POGO workers will also be subject to the 25 percent withholding tax rate or a minimum of P12,500 for any taxable month
The Senate on Wednesday approved a measure that will impose revenue taxes for Philippine offshore gaming operators (POGO) and their service operators.
Voting 17-3-0, senators passed on third and final reading Senate Bill (SB) 2232 which seeks to establish a tax regime covering all Philippine or foreign-based POGO considered doing business in the Philippines.
Under the measure, the online gaming facilities will be slapped with a five percent tax rate on their gross gaming revenue or receipts derived from their gaming operations.
POGO workers will also be subject to the 25 percent withholding tax rate or a minimum of P12,500 for any taxable month “considering that they are not engaged in trade or business within the Philippines.”
SB 2232 was passed on second and third reading within the same day after President Rodrigo Duterte certified it as urgent on Monday. This gives Congress the power to bypass the three-day reading rule before voting on it on final reading.
Senator Pia Cayetano who sponsored the bill as chair of the Senate Committee of Ways and Means earlier said it will “plug the loopholes” in the country’s tax code related to POGO operations.
Once enacted into law, the Philippines is targeted to earn around P28.7 billion in tax revenue collection from the gambling operations once enacted into law.
Of the figures 60 percent will be allocated for the implementation of Republic Act 11223 or the Universal Healthcare Law, 20 percent will be given to Health Facilities Enhancement Programs of the Department of Health while the remaining 20 percent will be allocated for the attainment of the Sustainable Development Goals with the specific SDG target to be determined by the National Economic and Development Authority.
The collected taxes will be directly remitted to the Bureau of Internal Revenue with the Philippine Amusement and Gaming Corporation and Investment Promotion Agencies serving as third-party audit platforms.
Only three senators — Senate Minority Leader Franklin Drilon and Senators Risa Hontiveros and Francis Pangilinan — objected to its approval.
In voting no, Pangilinan explained that he opposed its approval because of the “serious social costs” the hosting of POGO operations had inflicted in the Philippines.
Aside from the sharp increase in rent prompted by the arrival of Chinese employees in the country, the senator said POGO workers were also involved in various criminal activities such as the bribery of immigration officials, prostitution, money laundering, human trafficking, tax evasion, online fraud, kidnapping and murder.