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Congress asked to enact on proposed tax regime on POGOs

THE chairman of the House committee on ways and means on Friday called on Congress to enact his proposed regime on Philippine Offshore Gaming Operations (POGOs) in response to the recent Supreme Court (SC) issuance of a temporary restraining order (TRO) barring the tax authorities from imposing the Bayanihan II taxes on the gaming operators.

“The petitioners have used arguments that can easily be remedied by law. That’s why I defined operating POGOs as doing business in the Philippines. That cures the argument against territoriality. Who is to say they are foreign operations, when they use Philippine inputs, and operate within Philippine laws?,” said Albay Rep. Joey Sarte Salceda, panel chairman, on his House Bill (HB) 5267 or his proposed tax regime on POGOs.

“They can’t say they are Chinese operations, because gambling is illegal in China. They are Philippine operations. And my bill closes the ambiguity by stating in black and white that they are in fact doing business in the Philippines,” Salceda added.

Salceda anticipated that his bill will raise P45 billion on its first year of implementation.

The Bayanihan to Recover as One Act imposes a five percent franchise tax on wagers.

“Of course, I agree that POGOs should be taxed. But having it as a rider in the Bayanihan II, without having Senator [Pia] Cayetano’s committee hear it was haphazard. My committee already approved our version, but it would have satisfied the petition, since the tax base we used was gross gaming revenues, the international standard in taxing gambling,” Salceda added.

Salceda also said that his bill imposes reportorial requirements on POGOs.

“My bill would make it a case of tax evasion to defraud their reportorial requirements. There’s a very thin case for slapping POGOs with tax evasion in the current law,” Salceda added.

Salceda said that the House leadership is keen on taking the bill up, “along with other tax priorities, as soon as we finish CITIRA/CREATE.”

“But since the Senate and the House both agreed on the POGO taxes in Bayanihan II, the POGO tax bill should sail smoothly through the motions,” Salceda added.

Asked about his proposal’s impact on the property market, Salceda said that he expects the sector to remain vibrant.

“BPOs alone carried them through the pandemic this year, with little help from new POGOs. They will not be hurt,” Salceda said.