This was how Bureau of Internal Revenue (BIR) Deputy Commissioner for Operations Arnel Guballa reacted to the threat of some Philippine Offshore Gaming Operators (POGOs) to leave the country due to strict guidelines imposed by the government.
Guballa, who also heads the BIR POGO Task Force, said POGOs should stop their operations if they are unwilling to comply with the country’s rules and regulations, particularly on the payment of franchise tax and final withholding tax (FWT) due from the salaries of their foreign workers.
He said POGOs are not straightforward in declaring correct earnings and paying the appropriate taxes as evidenced by several closures last year.
Other revenue officials said the government does not only generate revenues from POGOs, but also reaps crimes like prostitution and robberies involving alien online workers.
The Philippine Amusement and Gaming Corporation (PAGCOR) has required the POGOs to settle all unpaid taxes with the BIR before allowing them to operate.
POGO lawyers argued that they should not be required to pay the franchise tax as earnings come from bettors outside the country.
Guballa insisted that the POGOs’ service providers based here generate income and are thus subject to taxation.
Franchise tax constitutes five percent of annual gross receipts and shared by the BIR and PAGCOR with the latter getting three percent in the form of license fees.
Guballa said the task force is concentrating its investigation on FWT because of the difficulty in assessing the actual income income of the industry which is the basis for the collection of franchise tax.
He said there is no way for the BIR to know the accuracy of their income declarations because bets of foreign players are not collected by the service providers based here but by POGOs themselves which are scattered all over the world.
There are 218 POGOs in the country employing more than 100,000 foreigners, but less than 10 have so far secured tax clearance.
The Department of Finance said the government can generate income of up to P20 billion from this source.
The BIR raised last year more than P6 billion paid mostly by POGOs that were temporarily padlocked for non-registration and payment of FWT.