Pagcor remits P11-billion dividend to government coffers

MANILA, Philippines - The Philippine Amusement and Gaming Corp. (Pagcor), a government and controlled corporation, remitted to the Bureau of the Treasury (BTr) roughly P11 billion last year despite the still unresolved debate with the Department of Finance (DOF) on the amount of taxes it should be paying to the government.

Pagcor, which operates casinos and other gaming activities in the country, remitted to the national coffers P10.97 billion in dividends, latest data from the Treasury showed.

This is 6.4 percent higher than the P10.31 billion worth of dividends Pagcor had remitted in 2007.

As a government-owned and controlled corporation, Pagcor is required by Republic Act 7656 or the Dividend Law to remit as much as 50 percent of its annual gross earnings to the government.

The DOF, the Bureau of Internal Revenues (BIR) and the National Tax Research Center wants Pagcor to pay corporate income tax pursuant to Republic Act 9337 or the Reformed Value Added Tax law.

The law deleted Pagcor from the coverage of government-owned and controlled corporations that are exempt from income tax.

The government also wants to impose value added tax (VAT) on Pagcor , saying that VAT had already replaced the 5 percent franchise tax imposed on the corporation. Furthermore, the government wants Pagcor to clearly define its basis for gross income tax computation. According to Pagcor , this translates to a reduction of about P1.048 billion yearly.

At present, Pagcor has four licensed casinos–Fontana Casino in Pampanga, East Bay Casino in Rizal, Poro Point Casino in La Union and Fort Stotsenberg, also in Pampanga.

The NTRC said that the government should require Pagcor to declare all its income and thus, remit a bigger amount of tax to the government. NTRC noted that Pagcor ’s operations have evolved, with bingo operations in its 13 Casino Filipino branches and through private bingo licensees.

“They are also engaged in internet gaming, chipwashing operations and licensing of privately operated casinos. There is therefore an urgent need to evaluate and define the sources of income on which the franchise tax and the 50-percent government share are based,” NTRC has said.

The NTRC cited that in 2006, Pagcor’s total income amounted to more than P24 billion.