Government crackdown on POGOs yields additional $25 million revenues

MANILA, Philippines — The government’s intensified effort against erring Philippine offshore gaming operators (POGOs) has so far yielded the government $25 million (about P1.2 billion) in additional revenues, the Department of Finance (DOF) said yesterday.

In a statement, Finance Secretary Carlos Dominguez said a task force led by the Bureau of Internal Revenue (BIR) has temporarily shuttered three POGO service providers, one of which one has already settled P1.2 billion in tax deficiencies.

Dominguez was referring to Great Empire Gaming and Amusement Corp. (GEGAC) which was closed down last Sept. 25 for failure to register with the BIR and had tax arrears amounting to P1.3 billion.

The company was allowed to resume operations last Sept. 27, after initially paying P250 million. It committed to settle the remaining P1.05 billion in three separate monthly payments through post-dated checks.

GEGAC was also required to update its withholding tax payments, and register its employees with the BIR.

Last Oct. 17, the BIR also padlocked Altech Innovations Business Outsourcing’s head office in Parañaque City and a branch in Pasay City for its failure to register as a value-added tax (VAT) taxpayer.

According to the DOF, the shutdown of the POGO service providers  was in compliance with Dominguez’s instructions for the BIR to crack down on offshore gaming operators and their service providers that fail or refuse to pay the tax liabilities of their foreign workers.

Dominguez warned that the government would not offer a respite in this campaign as part of its efforts to boost revenue collections.

“Basically we’re going hard against people who are evading taxes,” he said.

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

Meanwhile, the BIR, led by deputy commissioner Arnel Guballa, yesterday closed down 11 branches of POGO service provider New Oriental Club88 Corp. (NOCC) in Parañaque City due to failure to register with the BIR.

According to BIR, NOCC operates as a customer relations service provider and live studio streaming provider, with its main office located in Makati City.

Results of the agency’s investigation showed that NOCC has unregistered branches – as certified by the Revenue District Office No. 52- Parañaque City, which has jurisdiction over the said branches – in violation of Section 115 (b) of the Tax Code.

“The main branch is in Makati. That is registered but its branches are not. It’s like a bus operation. The franchise holder is registered but it has many colorum units,” Guballa said.

“They should be registered. Even under Pagcor (Philippine Amusement and Gaming Corp.) rules they should be registered, even every floor,” he added.

Guballa said the 11 branches employ some 6,700 Chinese nationals, but provided no estimates yet on the company’s total tax liabilities.

However, an industry source said only one out of the 11 questioned branches were actually operational as the other offices are still under construction.

The BIR had so far listed 218 POGOs and service providers in the country, employing a total of 108,914 foreign workers, Guballa earlier said.

The agency reported that it has so far collected P1.63 billion in withholding taxes from these firms covering the period from January to August.

This is higher compared to the P175 million in withholding taxes paid by the industry in 2017 and P579 million in 2018.