Drilon warns gov’t on billions in revenue losses if POGOs are wrongly classified as BPO firms

Published May 4, 2020, 12:00 AM

by manilabulletin_admin

By Hannah Torregoza

Senate minority leader Franklin Drilon on Monday warned the government against treating the Philippine Offshore Gaming Operations (POGOs) as part of the business process outsourcing (BPO) industry, saying the Philippines will lose billions in franchise tax and license fee revenues if it pursues such argument.

Senator Frank Drilon  (Senate of the Philippines Facebook page / MANILA BULLETIN)
Senator Frank Drilon
(Senate of the Philippines Facebook page / MANILA BULLETIN)

Drilon said that to treat POGOs as BPOs would be detrimental to the country’s efforts to collect franchise taxes that majority of the 60 licensed online gaming operators owe the government in 2019.

The law, the senator stressed, is very clear that POGOs are part of the gaming industry, not the BPO industry. And to claim that POGOs are BPO companies is insulting to the industry that has fueled the country’s economy for decades, he said.

“To say that POGOs are part of our BPO industry is a dangerous argument. It has far-reaching implications that will put the government at a grave disadvantage,” Drilon said in a statement.

The senator said the POGOs can use the statement as a defense against paying the required five percent franchise tax the government has imposed.

“It will put at risk the license fees being collected by the Philippine Amusement and Gaming Corp (PAGCOR),” Drilon said.

“If POGOs are considered BPOs, then there would be no need to pay the franchise tax and the license fee, he pointed out.

Under the law, Drion explained that the authority to operate and conduct games of chance is centralized in the PAGCOR. Entities, including POGOs, can engage in the gambling business only upon grant of a license or franchise from the state gaming regulator and to do that, they must pay the franchise tax.

Drilon also said that PAGCOR’s assertion that allowing POGOs to operate will help the government generate revenues to finance its efforts against the novel coronavirus or COVID-19 pandemic is “a very deceptive assertion.”

“It is the POGOs that owe the government billions of pesos in unpaid taxes. Bayaran muna nila yan (Let them pay that first),” Drilon asserted.

“If only these POGOs would pay their taxes, the amount would go a long way in our effort to alleviate the plight of the poor heavily affected by the crisis caused by COVID-19,” he pointed out.

The Inter-Agency Task Force (IATF) had earlier allowed the partial operation of POGOs after considering the latter as one of the essential industries that need to be resume operations. The government task force against COVID-19 also classified POGOs as part of the BPO industry, a move rejected by BPO-related companies.

Malacañang had defended the move, saying that allowing POGOs to resume operation will help the government generate more funds for its COVID-19 response.

Drilon, however, urged the Duterte administration not to circumvent the law, saying they should not choose what law to on the basis of whatever is convenient.

“Dati hindi sila BPO, ngayon BPO na? (They were not classified as BPO before, now they are considered BPOs?) POGOs are engaged in gambling. Period. Hence, they should be subject to the same rules that other gambling establishments are subjected to,” the minority leader reiterated.

“If the gaming industry is not allowed to operate during the enhanced community quarantine, then POGOs should not be allowed either. No special treatment, please,” Drilon appealed.