By Chino S. Leyco
The Bureau of Internal Revenue (BIR) has so far collected P200 million out of an estimated P2 billion a month of taxes to be paid by foreign nationals working in the Philippine offshore gaming operators (POGO).
The BIR, the government’s main tax agency, started collecting POGO personal income taxes in July and the initial tally was less than one-fourth of estimates, based on notices to collect.
“Around P200 million so far were collected from a number of POGO workers last month,” BIR Deputy Commissioner Arnel S.D. Guballa told reporters. “This is just preliminary. I believe there are more to come for the month of July.”
About P2 billion in personal income taxes are to be collected from currently registered POGOs, he said. At P2 billion a month, the amount of taxes to be collected from the POGO industry will amount to P24 billion a year – a revenue source that was non-existent some four of five years ago, before control over the sector was given by President Rodrigo Duterte to the Philippine Amusement and Gaming Corp. (Pagcor).
Guballa said that six offshore gaming operators began remitting the withheld personal income taxes from foreigners in the POGO sector.
He said with the initial P200 million from POGO workers for the month of July, they expect this amount to further rise in the coming months amid the agency’s intensified campaign against unregistered foreign nationals.
The BIR official, however, declined to name the six POGO firms that started remitting withholding taxes to the government, citing the bureau’s duty of confidentiality to the taxpayer.
Finance Secretary Carlos G. Dominguez III, meanwhile, said the BIR should ensure every taxpayer is treated fairly by going after foreign nationals and their employers “who fail to withhold and remit their contributions… for the public goods and services that we all use and enjoy.”
Dominguez earlier said the BIR continues to process the tax identification numbers (TIN) of POGO workers seeking to register with the tax bureau.
While the BIR has limitations in delivering the volume of TINs being required by gaming operators, Dominguez said that POGOs can begin withholding the income tax from their foreign workers.
Finance Undersecretary Antonette C. Tionko, meanwhile, said the BIR’s pace in releasing the POGO TINs is “pretty fast,” noting the tax agency has to manually register the names of foreigners applying with the bureau.
Tionko also said the BIR has to be very careful with the spelling because the English translation of the foreign workers’ names, who are mostly Chinese, is sometimes the same.
“I told them to complete the personal information with date of birth, gender, and everything. They are in the process of getting their TINs, like they issued them around 10,000,” Tionko said.
The finance official said operators can now withhold the income tax as long as they make sure it is indeed remitted to the BIR.
If POGO fails to remit the withheld income tax, Tionko said – “that is worse, the penalty for that is double, and it’s a criminal offense.”
She also said that foreign workers can enjoy lower income tax rate as long as they can prove that they have a legal residence status.
“Obviously, the default is they are non-residents and the burden is on the company to prove that they got the work permits, they have resident certificates. If they can’t show anything, it’s 25 percent tax,” Tionko said.
Dominguez, however, said they are only collecting withholding tax, adding the BIR knows that POGOs have certain arrangements with an investment promotion body as well as the PAGCOR.
“The way the POGO operates is they pay a fee to Pagcor in lieu of everything. We are not going after tax for their operation, we are going after the tax they were supposed to withhold from their workers,” he clarified. “We know they are tax free in the PEZA (Philippine Economic Zone Aithority) zone.”
He also said the government will run after unregistered POGOs since the BIR, along with other concerned agencies, already identified the legitimate offshore gaming firms in the country.
“Let’s do this deliberately step-by-step. Whoever is registered should be compliant then we will look for the unregistered. Let’s not try to solve the whole problem right away, let’s solve the ones we have in front of us,” Dominguez stressed.