The newly signed Bayanihan to Recover as One Act or Bayanihan 2 would raise P17.5 billion in additional revenues from Philippine Offshore Gaming Operators (POGO) and fast-track the construction of telecommunication towers in the country, according Senate Minority Leader Franklin M. Drilon who proposed the two most significant provisions of the law.
Drilon, a former Senate President, welcomed the signing of the Bayanihan 2 which provides for a P165.5-billion stimulus fund for pandemic response and recovery.
He 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.
Citing the estimates by the Department of Finance, Drilon said the Bayanihan 2 would more than double the tax collection from POGOs — from P7 billion estimated collection in 2019 to approximately P17.5 billion this year ‘’because of the reforms we have introduced in the measure.’’
The Duterte administration 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.
”All revenues from POGO will be used to fund the various types of assistance laid out in the Bayanihan 2 for all sectors affected by the pandemic,” he added.
The Drilon amendment 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 his 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,” Drilon said.
The Bayanihan 2 also tightened the regulations on POGO to fix the loopholes in the current system, he added.
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 could be considered as a fraudulent act constituting underdeclaration 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 Senate 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.