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SC stops new tax measure meant to address COVID-19 pandemic

VOTING 13-1, the Supreme Court (SC) has stopped the government from collecting five percent additional tax from gaming operators based overseas or the Philippine Offshore Gaming Operators (POGOs), which was meant to raise funds against COVID-19.

The decision was unanimous with only Associate Justice Marvic Leonen dissented.

According to the petitioners (14 POGOs), Section 11 (f) and (g) of the Bayanihan to Recover As One Act (Bayanihan 2) “imposes new taxes (in the guise of merely listing sources of funding) and are, therefore, an aberration because the entire law does not create or refer to the imposition of any new tax.

The petitioners added that Bayanihan 2 was envisioned as a temporary relief measure apparently enacted to address the COVID-19 pandemic and raise funds for the purpose.

However, a closer examination would show that Sections 11 (f) and (g) of the Bayanihan 2 Law impose new taxes (in the guise of merely listing sources of funding) and are, therefore, an aberration because the entire law does not create or refer to the imposition of any new tax,” they noted.

Makati City Pabakuna

Also, counsel for petitioners asserted that for a mere opportunity to operate, their clients would be “forced to pay the tax on their offshore income, even if the imposition is not constitutional.

The group also stressed that the law unfairly uses as “tax base” the totality of wagers made through POGOs even as these bets are made online outside the Philippines in violation of the territoriality principle of taxation.

The increase in tax was meant to raise revenue collection from POGOs from the P7 billion estimated collection in 2019 to around P17.5 billion in 2020.

The taxes were intended to help fund various government projects to address the COVID-19 pandemic, including the purchase of vaccines.

Publication Source :    People's Tonight
Hector Lawas
Court reporter for more than 20 years