Senators back bill taxing POGO operations

Published March 4, 2021, 7:45 PM

by Hannah Torregoza 

Senators on Thursday pushed for the passage of the bill seeking to tax Philippine Offshore Gaming Operators (POGO) to help the government generate revenues and fund its major programs, particularly on health and education, badly needed this time of a COVID-19 pandemic.

Sen. Sonny Angara (Joseph Vidal/ Senate PRIB)

Senator Sonny Angara said tax revenues from POGOs can fund the government’s universal health care, pension for the military and free tertiary education.

Angara, chair of the Senate Finance Committee, said he can see the entitlements grow massively over the years and the need to protect the government and fund these programs is essential.

“Money doesn’t grow on trees; we have to find it somewhere,” Angara said during the virtual hearing of the Senate Ways and Means Committee chaired by Sen. Pia Cayetano.

“I think this is a possible area, really, to generate revenues especially in this difficult economic environment,” Angara stressed.

Senate President Pro Tempore Ralph Recto, author of Senate Bill No. 1295 or the bill that seeks to establish a tax regime for POGOs, noted the huge potential revenues that could be collected from the POGO industry.

In 2019, Recto said the government could have earned roughly P38-billion from the POGO industry, since it is as huge as the Business Process Outsourcing (BPO) sector in the country.

Department of Finance (DOF) officials present at the hearing backed the proposal as they share the belief that POGOs are considered undertapped sources of revenues for the cash-strapped government. It is also listed as among the priority measures of the Legislative-Executive Development Advisory Council (LEDAC).

Cayetano’s panel also tackled Senate Bill No. 2076, filed by Sen. Imee Marcos and House Bill No. 5777 both of which seeks to impose levies on offshore entities operating in the country.

House Bill No. 5777, which seeks to impose income tax on alien individuals employed by offshore gaming licensees an amount equivalent to 25 percent of the salaries, wages, annuities, compensation, remuneration and other emoluments, was already passed on third reading by the House of Representatives last Feb. 8, 2021.

Marcos said her proposal is aimed at establishing a definitive law that would settle the so-called “lost potential tax revenues” and address questions with regard to the taxability of POGOs and POGO employees/workers.

“We would like to be clear and certain that whatever bill or law we come up with will overcome the problems that the Supreme Court (SC) based its temporary restraining order (TRO) last January,” Marcos said.

The SC, last Jan. 5, issued a TRO stopping the Bureau of Internal Revenue from collecting a five percent franchise tax on POGOs, a provision included in the Bayanihan to Recover as One Act or Bayanihan 2 law.