House leaders agree to adopt Senate bill on POGO taxes — Salceda

Published July 20, 2021, 5:43 PM

by Mario Casayuran

Albay 2nd District Representative Joey Salceda said on Tuesday, July 20, that Speaker Lord Allan Velasco is amenable to the House of Representatives adopting the Senate’s version of the fiscal regime for Philippine offshore gaming operators (POGOs).

The House Ways and Means Committee chairman said he and Velasco spoke about Senate Bill No. 2232, and explained its difference with their counterpart measure.

“I showed that the Senate version is primarily a restatement of the House version. There are absolutely no differences in revenues raised. The tax administration provisions are slightly different, but any rough edges can be resolved by regulation,” he disclosed.

“We stand to gain P13.4 billion on the first year, and P176.9 billion over five years from this measure. We expect POGO revenues to grow with more clarity in the fiscal and regulatory regime, as well as the recovery of China’s economy,” he added.

Salceda earlier wrote to the House leadership recommending the adoption of the POGO tax regime passed by the Senate.

“Once we adopt it, there will be no need for a bicameral conference committee. We can send it to the President for his signature the session after his SONA,” he said.

“This is also the Speaker and the House leadership heeding the President’s certification of urgency of the bill. The Speaker’s style has been outcomes-based, and the Senate version’s outcomes are acceptable to us,” he continued.

He said both Senate and House bill propose a five-percent tax on gross gaming receipts for “offshore gaming licensees”, and a 25-percent tax on gross income for non-resident aliens working under the Service Providers of these licensees.

Both also clarify that service providers to POGOs are domestic corporations, and are thus subject to the regular national and local taxes applicable to domestic corporations.

The bills also seek to impose a five percent tax on gross gaming receipts and revenues from other services.

“This is consistent with international practice and would not be as burdensome as the five percent tax on gross turnovers as proposed in Bayanihan 2. This is also consistent with the House’s position on taxing offsite betting activities. House Bill 8065, approved by the House on December 15, 2020, uses gross receipts or commissions, the equivalent of GGR, as its tax base,” Salceda pointed out.

The bills also impose a final tax of 25 percent of gross annual income on nonresident alien employees, remitted annually to the BIR, with presumptive minimum tax base of P600,000 gross annual income.

The versions also clarify that economic zones and the Philippine Amusement and Gaming Corporation (PAGCOR) can collect regulatory fees from the licensees, provided that such fees shall not exceed two percent of GGR, or a minimum guaranteed fee, whichever is higher.

“This addresses the concern that a fiscal regime directly under the national government will drain PAGCOR and the economic zones where OGLs are located of a revenue stream,” Salceda said.

“All in all, both versions are strong on administration and tax generation. SONA happens on Monday. We can send President Duterte a bill to sign by Tuesday’s session,” Salceda said.