Drilon: Bayanihan 2 would yield P17.5 B revenues from POGOs, push construction of telecom towers

Published September 12, 2020, 7:09 PM

by Mario Casayuran

Senate Minority Leader Franklin M. Drilon said Saturday, Sept. 12, that the Bayanihan 2 Act would yield P17.5 billion revenues from Philippine Offshore Gaming Operators (POGO) and would pave the way to the faster construction of telecommunication (telco) towers.

Senator Franklin Drilon (Senate of the Philippines / MANILA BULLETIN FILE PHOTO)

Drilon’s statement highlights his amendments in the law which ensures higher taxes from POGO and the faster building of telco cell towers.

The newly-signed Bayanihan to Recover as One Act will raise P17.5 billion in additional revenues from the POGOs and fast-track the construction of telecommunication towers in the country.

In a radio interview, Drilon said he welcomes the signing of the Bayanihan 2, which provides for a P165.5 billion stimulus fund for pandemic response and recovery.

Drilon said the Bayanihan 2 redefined the taxation of POGO and tightened the regulations in a bid to raise funds to augment the government’s dwindling resources.

“The Bayanihan 2 will more than double the tax collection from POGO – from P7 billion estimated collection in 2019 to approximately P17.5 billion this year because of the reforms we have introduced in the measure,” Drilon said, citing the estimates by the Department of Finance (DOF).

The government wants to tap into the offshore gaming industry to close budget gaps in the P165-billion stimulus fund, he noted.

The Bayanihan 2 could only fund up to P140 billion. Thus, the measure sets aside P25 billion as standby appropriation which could be funded when there are additional revenues or windfall collections, Drilon noted. 

Drilon said the Bayanihan 2 strictly mandates that the five percent franchise tax should be on the gross bets or turnovers or the pre-determined minimum monthly revenues from gaming operations, whichever is higher, earned by offshore gaming licensees, including gaming operators, gaming agents, service providers and gaming support providers.

“With this amendment, the government can now impose the five percent franchise tax on the gross bets or turnovers which will yield more revenues for the government,” he added.

The Bayanihan 2 also tightened the regulations on POGO to fix the loopholes in the current system, Drilon said. 

Under the measure, the tax shall be computed on the peso equivalent of the foreign currency used, based on the prevailing official exchange rate at the time of payment, in order to prevent under-declaration of income.  

Failure to follow the provision would be considered as a fraudulent act constituting under-declaration of taxable receipts or income, and should be subject to interests, fines and penalties under the National Internal Revenue Code of the Philippines, Drilon added. 

The measure orders the Bureau of Internal Revenue (BIR) to shut down POGOs which fail to pay the taxes due.

The minority leader said he hopes for the immediate enactment of the measure in order to provide the much-needed relief and assistance to low-income families, healthcare workers, small and medium enterprises, and the tourism and transportation sector, among others.

The Bayanihan 2 also paves the way for faster construction of cell towers in the country which is said to have the slowest Internet connection in Asia.

Drilon said the law contains a provision that he proposed which temporarily suspends most permits for the installation and operation of cell towers in the country within the next three years.

‘’There are about 29 to 35 documentary requirements and permits before a single tower could be built in a subdivision, barangay or town,’’ Drilon noted.

These permits include consent of the neighbors, barangay resolution, certificate of non-coverage, zoning clearance, height clearance, radiation evaluation studies, building permit, a city or municipal resolution, occupancy permit, mayor’s permit, memorandum of agreement with DENR-NIPAS, among others.

Drilon also proposed a provision against the issuance of any temporary restraining order, preliminary injunction against the construction of telecommunications infrastructure, including cell sites and cell towers by courts except for the Supreme Court.