By Chino S. Leyco
The fear factor has started to drive the tax compliance of Philippine offshore gaming operators (POGO) as collections of the Bureau of the Internal Revenue (BIR) from online casinos continued to show improvements every month.
BIR Deputy Commissioner Arnel S.D. Guballa said the tax bureau already monitored 218 POGO service providers operating in the country with exactly 108,914 foreign national employees who are mostly Chinese.
Guballa initially reported that BIR income tax collection from POGO foreign workers reached P1.4 billion as of August this year. However, he said that this amount further increased by additional P230 million to P1.63 billion.
For September, Guballa expects that withholding tax remittance will sustain its growth following the recent closure of a tax-dodging POGO service provider operating in Quezon City, Parañaque and Pampanga that created "fear" among operators.
“Our collection is improving because they know that we’re doing enforcement activity. As you know our dialogue with them had lapsed, we sent them notices and they are not complying, so we did the raid,” Guballa said.
The BIR official added that other POGO service providers had reached out with the bureau after the agency conducted its raid on Great Empire Gaming and Amusement Corp. that yielded P1.3 billion in tax payment.
Finance Secretary Carlos G. Dominguez III said the BIR will squeeze all POGO service providers that remain non-compliant with tax laws and regulations despite several notices.
Asked about the status of the tax identification numbers (TIN) for foreign workers, Guballa said the BIR has an ongoing process to provide the pre-employment requirement for the application of a work permit.
Based on BIR monitoring in coordination with the Philippine Amusement and Gaming Corp. (Pagcor) as well as Bureau of Immigration, foreign worker employee turnover rate in the POGO industry is relatively high.
For this reason, Guballa said the BIR continuously needs to process new TINs for inbound POGO workers, adding processing the application forms were also difficult as some Chinese names were similar or sounded alike.
Guballa, meanwhile, reported to Dominguez about the prevalence of employee poaching in the POGO sector, which is considered a violation of immigration rules on alien employment permit.
“That’s not allowed,” Dominguez said, noting POGO foreign workers are only permitted to work for the company that has sponsored their work visas.
Dominguez, meanwhile, said the ongoing BIR campaign against unscrupulous POGOs would benefit not only the government’s revenue collection, but also Pagcor as the gaming regulator, the immigrant bureau as well as the Department of Labor and Employment.