Palace: POGOs should pay taxes
MANILA, Philippines — Malacañang said Tuesday that online casinos in the country should be taxed, adding that the Duterte administration will not be stopped from collecting what is due to the government.
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.
But in an opinion given to the Philippine Amusement And Gaming Corp. and the BIR, the Office of Solicitor General argued that POGO operators cannot be taxed based on the “source of income” principle under the country’s tax code as they earn “from bets placed by its registered foreign subscribers.”
In a statement, presidential spokesman Salvador Panelo said that under the National Internal Revenue Code, POGOs are subject to Philippine taxes even if their income was derived from a source outside of country.
POGOs considered as foreign corporations are taxable but only for income which they derived from sources within the country, Panelo added.
“With this, we trust that the [Department of Finance], together with the BIR, has the competence to evaluate the respective charters and operations of these entities in order to subject them to Philippine taxes in accordance with the law,” Panelo said.
Most workers in the POGO sector are from China, accommodating Chinese punters overseas. BIR deputy commissioner Arnel Guballa last month said the bureau has so far listed 218 POGOs and their service providers with a total of 108,914 foreign workers.
According to the DOF, online casinos are “already paying a fee” as POGOs are already subject to a 5% franchise tax under existing revenue rules.
The government collected P1.63 billion in withholding taxes from POGOs and their service providers from January to August this year.
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