Business

5% on gross bets: POGO to more than double tax payments to P17.5B to help cover stimulus fund shortfall

The Department of Finance expects Philippine Offshore Gaming Operators (POGOs) to generate up to P17.5 billion in annual revenues.

This is more than double tax collections from POGOs from P7 billion in 2019.

Secretary Frank Drilon said the DOF planned to spend P165 billion for the COVID stimulus fund under the recently signed Bayanihan Act but it only has P140 billion in revenues available.

Drilon said Bayanihan 2 would set aside P25 billion as standby appropriation which can be funded when there are additional revenues or windfall collections, such as from POGOs.

“All revenues from POGO will be used to fund the various types of assistance laid out in the Bayanihan 2 for all sectors affected by the pandemic,” he said.

To settle the tax controversy involving POGOs, Drilon pushed for the imposition of a five percent franchise tax son the gross bets or turnovers or the predetermined minimum monthly revenues from gaming operations, whichever is higher, earned by offshore gaming licensees, including gaming operators, gaming agents, service providers and gaming support providers.

“With this amendment, the government can now impose the 5 percent franchise tax on the gross bets or turnovers which will yield more revenues for the government,” said Drilon.

The Bayanihan 2 also plugged the loopholes in the current POGO system.

Under the measure, the tax shall be computed on the peso equivalent of the foreign currency used, based on the prevailing official exchange rate at the time of payment, in order to prevent under-declaration of income.

Failure to follow the provision will be considered as a fraudulent act constituting underdeclaration of taxable receipts or income, and shall be subject to interests, fines and penalties under the National Internal Revenue Code of the Philippines.

POGOs that fail to pay their tax dues would be immediately shut down by the Bureau of Internal Revenue (BIR).

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