Foreigners employed at Philippine offshore gaming operators (POGOs) could be required to pay a 15% tax on their earnings in the Philippines under a bill recently filed in the national legislature.
Albay Representative Joey Salceda submitted late last month a legislation that, if it succeeds in the Congress, will subject POGOs and their foreign workers to additional taxes amid growing pressure on the online gambling businesses that are licensed in the Philippines to provide their services anywhere outside the country.
Under, Rep. Salceda’s measure, foreign workers at local POGOs or at their service providers must pay taxes on what they earn in the Philippines. The piece of legislation reads that any foreigner who is employed by a POGO license holder must pay a 15% tax on their salaries, wages, annuities, compensation, remuneration, and any other emoluments, including allowances and honoraria.
House Bill 5267 also outlines what taxes should be imposed on POGOs. Under the legislation, POGOs must pay a 5% tax on gross receipts. That rate was previously suggested by the Philippine Bureau of Internal Revenue.
The proposed new tax regime received support from Philippine Finance Secretary Carlos G. Dominguez III. The official said that he had not seen the exact proposal, but “in general, yes […] I think that’s a good idea.”
Codifying the POGO Tax Regime
Rep. Salceda’s bill arrived as POGOs are facing growing pressure over what they should contribute to Philippine coffers for being allowed to set up their businesses on the territory of the country and to conduct online gambling activities.
In recent weeks, several POGO license holders were ordered to shut their operations for failing to pay their tax dues. The crackdown on offshore gambling operators kicked off in September. Back then, Mr. Dominguez said that they would “close down organizations that don’t withhold and remit the proper amount of taxes from their employees.”
Rep. Salceda hinted that he was preparing a tax-focused bill earlier in October. Of his proposal, the lawmaker told reporters that “codifying the tax regime for POGOs will provide the government a broader set of levers with which to monitor and oversee the industry and to stabilize the gyrations in tax revenue intake and enforcement.”
The Philippines’ POGO industry has been thriving over the past several years. Offshore gambling organizations have set up massive businesses in the country as a result from the large demand for that type of offering in Southeast Asia. Around 130,000 non-Filipino workers are employed in the POGO sector.
According to previous estimates by the Department of Finance, the Philippines could annually take PHP24 billion (approx. $475 million) for every 100,000 foreign POGO workers if they paid taxes in the country. The Bureau of Internal Revenue said in August that it had collected PHP200 million (approx. $4 million) in income taxes from foreigners working at locally licensed offshore gambling operators.
Source: Bill sets 15% tax on foreign POGO workers, CNN Philippines
Follow us on Facebook and Twitter to stay up to date on the day’s top casino news stories
