APPROVED | Duterte signs law imposing more taxes on POGOs, cites need for COVID-19 funds

September 23, 2021 , 03:11 PM

By Beatrice Puente

(September 23, 2021) – President Rodrigo Duterte has signed into law a measure imposing additional taxes on Philippine Offshore Gaming Operators (POGOs), his spokesperson Harry Roque said on Thursday, opening up more revenue sources for the government during the COVID-19 pandemic.

Roque said Duterte approved the proposal on Wednesday or about four months since he signed the bill as urgent.

“Bahagi ito sa ating mahigpit na pagre-regulate ng lahat ng klase ng gambling at pagbabawal sa iligal na sugal,” said Roque in his press briefing.

Apart from franchise taxes, POGOs will be required to pay a 5% gaming tax on all gaming revenues for the whole year whether they are based in the Philippines or abroad. Even foreigners working at these gaming corporations need to pay a 25% withholding tax.

Some 60% of the total revenue collected from gaming firms will be dedicated to the Universal Healthcare Act implementation, 20% for the enhancement of health facilities, and another 20% for sustainable development goals.

POGOs, usually run by businessmen from China, paid a total of P7.18 billion in taxes to the Bureau of Internal Revenue last year but the amount is expected to rise way higher with the approval of the new tax measure amending the National Internal Revenue Code.

But many gaming operators were caught evading taxes over the past few years, with senators flagging the P51 billion worth of revenues lost due to POGOs’ non-payment of taxes. Despite this, Duterte has repeatedly insisted that POGOs are “clean” as they provide employment opportunities for Filipinos.

“Laro lang ‘yan para sa kabila, but it employs something like 20,000 in Manila,” said Duterte last year.

Sen. Risa Hontiveros, one of the lawmakers who opposed the bill, wants POGOs to leave the country after paying their unpaid taxes. She also hit the numerous crimes and controversies linked to POGOs, including human trafficking, bribery, prostitution, and money laundering.

A study by the Anti-Money Laundering Council (AMLC) last year noted an increasing level of threat surrounding the possible flow of illegal funds in POGOs.

“The social costs that came along with the spike of POGOs in our country will always outweigh any revenue that the government may generate from them. We simply do not need them,” said Hontiveros.

Despite these sentiments, Duterte approved the operations of POGOs in the country, citing the need to raise funds during the COVID-19 pandemic. Recently, he also allowed casinos to operate in Boracay to generate more funds for the government, reversing his previous pronouncement that he will not allow gambling on the world-class island.

“Sabi nila lahat, sa panahon ko pinayagan ko ang sugal. Correct. That is true,” said Duterte. “Itong sugal, bakit ko pinayagan? Wala tayong pera. Ngayon kailangan natin ng pera, the most sensible thing is really just to encourage those activities.”

(PM)

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