Finance chief says lawmaker’s proposal to tax POGOs ‘a good idea’

MANILA, Philippines — Finance Secretary Carlos Dominguez III said he would support a lawmaker's proposal to tax online casinos in the Philippines, describing the plan as a “good idea”.

The Bureau of Internal Revenue has already been going after Internet-based gambling companies, locally known as POGOs for Philippine offshore gambling operators, for alleged tax evasion. BusinessWorld reported last week that the BIR padlocked a POGO for "[not being] registered for value-added tax purposes, with unpaid taxes worth an estimated P100 million."

The POGOs also remit to the government witholding tax on compensation.

“Yes, I haven't seen the exact proposal, but in general, yes. I think that's a good idea,” Dominguez said of Rep. Joey Salceda’s (Albay) bill.

Under Salceda’s proposal, POGOs will be slapped a 5% franchise tax on their revenues and on the earnings of their service providers.

Salceda — who chairs the House Ways and Means committee — also wants to register POGOs as resident corporations as the basis for their taxability. 

According to the Finance chief, online casinos are “already paying a fee” as POGOs are already subject to a 5% franchise tax under existing revenue rules. 

READ: BIR warns POGO service providers to follow tax laws

The government has so far collected P1.63 billion in withholding taxes from POGOs and their service providers from January to August this year, the Bureau of Internal Revenue said.

Dominguez earlier ordered the BIR to file appropriate cases against tax-dodging POGO firms.

Most workers in the POGO sector are from China, accommodating Chinese punters overseas. BIR deputy commissioner Arnel Guballa said the bureau has so far listed 218 POGOs and their service providers with a total of 108,914 foreign workers. 

Last July, the Chinese Embassy in Manila urged the Philippine government to “ban all online gambling” and signalled an intensified crackdown on offshore gambling in a bid to prevent its citizens from being lured into an industry blamed for higher crimes and social problems in the mainland.

The existence of POGOs had also raised concerns in the Philippines over the economic, livelihood and national security implications of an influx of Chinese nationals.

RELATED: Defense authorities concerned about POGO proximity to military installations