POGO to become global player – study

Published December 1, 2019, 12:00 AM

by manilabulletin_admin

By Chino S. Leyco

The Philippines is poised to become a major player in the global offshore gaming industry owing to country’s conducive environment for Internet-based games of chance, state-run think tank National Tax Research Center (NTRC) revealed.

Based on the journal entitled “Profile and Taxation of Philippine Offshore Gaming Operations,” the government’s tax research arm said the country has advantages in global online casino sector, which caters to overseas-based and non-Filipino gamblers.

According to NTRC, global offshore online gaming market is expected to exceed $60 billion next year and the Philippines is leading the Asia Pacific region in cashing in on the booming online gaming known as POGO (Philippine Offshore Gaming Operators).

“Offshore gaming is proving to be a promising revenue generating industry,” NTRC said, noting the Philippine Amusement and Gaming Corp. (Pagcor) alone already generated ₱12 billion from POGOs since this sector began operations in late 2016.

“The industry has yet to reach its fullest potential and still has enough elbow room for growth and improvement in terms of tax collection, safeguards, audit, among others,” NRTC said.

According to the state tax research arm, one of the advantages of the Philippines is its good regulatory regime for offshore gaming.

“It [POGO] is a legal and licensed activity in the country. Hence, it ensures that online games are properly regulated and monitored by competent regulating government bodies,” NTRC said.

Likewise, NTRC said the country is known for low real estate acquisition and operational costs as well as competitive labor costs compared to other major Asian cities.

“Filipinos are likewise known to be highly skilled and educated, which makes doing business in the country easier,” NTRC said.

“There are also available prime grade buildings located in safe, secured and accessible areas, equipped with high-speed fiber optic telecommunication facilities and uninterruptible power supply necessary for 24/7, operations,” it added.

NTRC also cited the Philippines’ proximity to most Asian countries as an advantage for gamblers from Macau, China, Japan, and Korea, making “the country an excellent place to do business.”

“Given the advantages of the Philippines in terms of availability of office space, labor, tax incentives, and technology, it is not farfetched that the country would be a major player in offshore gaming industry worldwide,” NRTC concluded.

Other territories that allow offshore gaming operations are Panama, Malta, Kahwnawake in Canada, Isle of Man, Gibraltar, Atigua and Barbuda, as well as State of Alderney. In ASEAN, the Philippines is the first and only country that grants license to online casinos.

Finance Secretary Carlos G. Dominguez III earlier said that he wanted to secure the POGO sector as government’s fresh revenue source after successfully raising about ₱1.63 billion in withholding taxes in January to August this year.

The Bureau of Internal Revenue is also targeting to collect around ₱2 billion a month from foreign workers employed by around 218 POGO service providers operating in the country.

The Department of Finance earlier clarified that foreign-based online casino operators whose revenues come from bets and payouts from gamblers outside the Philippines are not covered by local taxes.

However, Philippine-based companies engaged in offshore gaming services are subject to local tax laws. These POGOs are those that employ foreign nationals in the country, handle the recording and live streaming of online games, as well as perform IT support services.

 
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