House panel to review tax on POGOs

A House leader has filed a measure that seeks to legislate the imposition of taxes on Philippine Offshore Gaming Operations (POGOs).

Chairman of the House Committee on Ways and Means  Albay Representative Joey Salceda filed House Bill 5267 whose main purpose is to  clarify whether taxes should be imposed on POGO employees.

The POGO is  proliferating  in the country.

The Bureau of Internal Revenue has earlier issued Revenue Memorandum Circular No. 102-2017 stating that “the entire gross gaming receipts/earnings or the agreed or pre-determined minimum monthly revenues/income from gaming operations under existing rules, whichever is higher, shall be subject to a franchise tax of 5 percent in lieu of all kinds of taxes, levies, fees or assessments of any kind, nature or description.”

However, Salceda said there should be a law that answers  questions on POGO’s taxability to “once and for all address confusion on the taxation of this emerging industry.”

“As POGOs are companies doing business in the Philippines, their employees’ income shall be subject to tax,” Salceda stressed.

The solon said a clear and definitive tax regime for POGOs will be a potent source of revenue for the government. At the same time, it will also put POGO facilities under stricter oversight.

“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,” he said.

Under the bill, a foreign individual employed and assigned in the Philippines by an offshore gaming operator or licensee should pay a 15 percent tax on the salaries, wages, annuities, compensation, remuneration and other emolutions like honoraria and allowances from the operator.

The bill added that Pertinent income tax will also be imposed on any income earned by the foreign POGO employees from all other sources in the Philippines.