By Charissa Luci-Atienza
Less than a month after it hurdled the House Committee on Ways and Means, a bill seeking to impose a five-percent franchise tax on all offshore gaming companies’ gross receipts derived from gaming operations has been scheduled for plenary debates next week.
Albay Rep. Joey Salceda, principal author of the bill, said the plenary will tackle next week House Bill 5267, which seeks to amend Sections 22, 25, and 119 of the National Internal Revenue Code of 1997, as amended.
“The new POGO (Philippine Offshore Gaming Operations) tax, it will go to the plenary next week,” he told reporters yesterday.
On November 18, 2019, the House Committee on Ways and Means, chaired by Salceda unanimously approved HB 5267 despite the opinion of the Office of the Solicitor General (OSG) that the POGOs cannot be taxed, citing the “source of income” principle under the Revenue Code.
Salceda said the bill seeks to generate P60 billion in revenues for the national government.
“Essentially, Pagcor (Philippine Amusement and Gaming Corporation) should collect the five percent from the POGOs and remit it to the BIR. They are paying the income tax especially the service providers. But nobody pays the five percent,” Salceda said explaining the salient provisions of the committee-approved measure.
“They are supposed to pay the same, 30 percent income tax. Unfortunately, only 10 of the 60 [POGO licensees] are registered with the BIR,” he lamented.
Salceda explained that under the measure, a five-percent franchise tax is imposed directly on gross winnings of the POGOs licensed by the Pagcor.
Currenty, Pagcor imposes a 2-percent regulatory fee on POGOs.
Salceda said his panel decided to impose a 25-percent withholding tax on foreign nationals employed in the Philippines by an offshore gaming licensee with a minimum threshold of P600,000 per annum, instead of 15 percent tax, which was originally proposed.
The panel agreed to increase the minimum threshold to P600,000 per annum from the originally proposed P250,000—meaning foreign employees who work for POGOs who have a minimum annual income of P600,000 shall pay an additional 25 percent tax on their salaries, wages, annuities, compensation, remuneration, honoraria, and allowances.
Salceda noted that under the bill, Pagcor will issue licenses after POGO’s registration with the Bureau of Internal Revenue (BIR).
The Pagcor, Cagayan Economic Zone Authority (CEZA) and the Department of Labor and Employment (DOLE) rallied behind the passage of the measure.