‘Govt needs to return franchise tax to POGOs’

THE Supreme Court (SC) has upheld its decision issued last year which declared as unconstitutional the government’s imposition of a 5% franchise tax on gross bets from gaming operations of the Philippine Offshore Gaming Operators (POGOs).

In an eight-page resolution, the SC denied the motion for reconsideration filed by the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) seeking the reversal of the said ruling.

The high court directed the government to refund POGO licensees of the 5% franchise tax it collected from them under the Bayanihan 2 Law.

“It is evident that not to order a refund will result in injustice and inequity on the part of the POGO licensees. Thus, any amount that was collected from the POGO licensees based on the implementation of the Bayanihan 2 Law, and prior to the passage of R. A. 11590 (An Act Taxing Philippine Offshore Gaming Operations) should be returned,” the high court declared.

“All things considered, the Court finds no compelling reason to reverse and set aside the assailed decision. Thus, the motion for reconsideration must be denied with finality,” the SC said.

The SC also ordered that an entry of judgment be issued immediately in the case.

In its motion for reconsideration, the government through respondents DOF and the BIR, argued that the assailed tax issuances are valid as these were issued on the account of the expanded licensing and regulatory authority of the Philippine Amusement and Gaming Corporation (Pagcor).

The said respondents maintained that offshore-based POGOs are subject to franchise tax and income taxes.