Business

POGOs score victory after SC ruled against 5% franchise tax

Philippine Offshore Gambling operators started the year in jubilant mode after the Supreme Court issued an order stopping the imposition of a five percent franchise tax on POGOs.

Citing an unnamed source, ABS-CBN News reported that the high court voted 13-1 to grant a temporary restraining order on the collection of five percent tax on gaming operators based overseas. Only SC Justice Marvic Leonen dissented.

The SC has yet to formally release its order.

The Department of Finance and Bureau of Internal Revenue maintained that the franchise tax applies to all licensed Pogos where here or abroad, and that there was no change of rules midstream.

The Philippine Amusement and Gaming Corp., however, claimed that the franchise tax was not previously being collected by the BIR from POGOs, citing a legal opinion by the Office of the Solicitor General.

However, the BIR argued that the entire gross gaming receipts/earnings or the agreed or pre-determined minimum monthly revenues/income from gaming operations under existing rules, whichever is higher, should be subject to a franchise tax of 5 percent, in lieu of all kinds of taxes, levies, fees or assessments of any kind, nature or description.

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