By CHINO S. LEYCO
Tax payments of Philippine offshore gaming operations (POGO) to the Bureau of Internal Revenue (BIR) jumped more than double last year following the government’s crackdown on erring industry players.
In a statement, Finance Secretary Carlos G. Dominguez III said that ₱6.42 billion in taxes from POGOs and their service providers were collected by the BIR last year, an increase of 169 percent compared with ₱2.38 billion in 2018.
Dominguez said the higher tax take was due to the sustained campaign against errant POGOs and their service providers that have eschewed tax payments, including the income taxes from foreign nationals working in the industry.
Of the total collections from POGOs, withholding taxes reached ₱5.1 billion while income taxes totaled ₱644.1 million. Some ₱91.1 million in value-added tax and percentage taxes were also collected, plus ₱81.1 million in documentary stamp taxes and ₱469.1 million in other taxes.
Based on the BIR monitoring, there were 108,914 foreigners employed by 218 POGO service providers last year.
The bureau, meanwhile, issued 170 notices to collect ₱27.35 billion in tax liabilities from errant POGOs.
Since the start of the government’s intensified monitoring, the BIR has shuttered the operations of at least four companies operating as POGO service providers, but failed to register their operations as such.
For 2020, Dominguez assured there will be no letup in the ongoing crackdown as the BIR further steps up its campaign against errant POGOs to hit the government’s ₱2 billion a month target collection from the sector.
“Basically we’re going hard against people who are evading taxes,” Dominguez said.
Meanwhile, BIR Deputy Commissioner Arnel S.D. Guballa said they have already cleared the backlog of tax identification numbers (TINs) and the bureau can now keep pace with the number of inbound POGO workers, who are mostly Chinese nationals.
Guballa said that foreign worker employee turnover rate in the POGO industry is relatively high, thus the BIR continuously needs to process new TINs for inbound employees.
The processing of TIN, which is a pre-employment requirement for the application of a work permit, is also difficult as some Chinese names were similar or sounded alike, the BIR official added.
In 2019, the BIR had some difficulty in issuing TINs amid a surge in the number of applications from foreign POGO workers following the government’s campaign against erring service providers for offshore gaming operators.
Guballa said that withholding tax remittance of POGO companies increased last year and they are also confident of hitting the ₱2 billion a month collection from the industry.