MANILA, Philippines — Tax collections from Philippine offshore gaming operators (POGO) and their service providers rose to P6.42 billion last year amid the government’s strengthened crackdown against delinquent companies, according to the Department of Finance (DOF).
According to the latest data from the DOF, the government saw a P4.04 billion, or 169-percent, jump in tax collections from the POGO industry in 2019 from P2.38 billion in 2018.
The DOF said the higher tax take was a result of the government’s campaign against offshore gaming operators and service providers which have evaded paying taxes, including income taxes that should be imposed on foreign nationals working in these firms.
Broken down, the Bureau of Internal Revenue (BIR) said P5.13 billion of the total tax collections came from withholding taxes, P644.07 million from income taxes, while the remaining P91.13 million came from value added tax and percentage tax collections.
Collections from documentary stamp taxes reached P81.11 million, while other taxes amounted to P469.13 million.
The BIR said it also issued 170 notices to erring offshore gaming operators and service providers last year, corresponding to a total of P27.35 billion in unpaid tax liabilities from gaming operators.
In an interview with reporters, BIR deputy commissioner Arnel Guballa said more offshore gaming firms have expressed their commitment to comply with tax laws in the face of the government’s continued efforts against delinquent offshore gaming operators.
However, Guballa said there is a challenge in capturing all foreign POGO employees into the tax net as they only work in the country for a short time before going back to their home countries.
“We heard from sources that their employees come and go,” the BIR official said.
Guballa also said that the increased crackdown against offshore gaming operators did not discourage some players from conducting business in the Philippines.
“Others say they want to register, they want to secure a licence,” he said.
There are currently 60 offshore gaming operators that are licensed by PAGCOR. However, PAGCOR earlier imposed a moratorium on new licenses until such time that issues plaguing the industry are addressed.
The BIR is also monitoring 218 offshore gaming operator service providers in the country, which are estimated to employ about 108,914 foreign workers.
Last year, the BIR, through its Task Force POGO, temporarily shuttered the operations of four offshore gaming service providers.
The DOF estimates that the government would be able to generate about P2 billion in additional revenues a month from the withholding tax of foreign workers in the POGO sector.
Finance Secretary Carlos Dominguez has expressed support for a proposal of Albay Rep. Joey Salceda to impose additional taxes on the offshore gaming industry.