After shuttering several licensed Philippine Offshore Gaming Operations (POGO) in Cagayan, the Bureau of Internal Revenue (BIR) warned non-compliant online gaming licensees and their service providers to register and pay taxes or face closure.

In a statement Wednesday, Feb. 23, the bureau that contributes about two-thirds to government coffers said it will ensure appropriate action against erring or non-compliant POGOs.

“The BIR will shutdown and/or penalize erring or non-compliant POGOs,” it warned.

Last Feb. 11, 18 POGO licensees of the Cagayan Export Economic Zone Authority (CEZA), including their support service providers, were temporarily closed during enforcement operations by the BIR.

Following the raids, BIR Commissioner Caesar R. Dulay said these closure operations against unregistered POGO entities, along with other tax enforcement activities, serve as a deterrent for those who would commit tax violations.

“We urge all taxpayers to comply with the Bureau's registration requirement, filing and payment of taxes, and other tax obligations in order to avoid facing business closure, penalties and possible criminal charges before the court,” Dulay said.

The business operations of the 18 POGO licensees and their service providers will remain suspended until the BIR’s registration requirements and other pertinent tax regulations are complied with and the corresponding deficiency taxes and penalties are paid, the agency

said.

To date, there are 40 POGO licensees and 168 POGO service providers registered with the BIR.

As part of its mandate, the agency conducts regular surveillance and raids of non-compliant POGOs as they cheat and deprive government of much needed revenues for its pandemic response.

Earlier, the agency reported that the newly enacted tax law generated P1.22 billion in additional revenue during its initial months of implementation. The number could be higher if not for the unscrupulous non-registered or non-compliant operators.

“Despite the pandemic, from October 9, 2021 to December 31, 2021, the BIR has collected a total of P1.22 billion from Offshore Gaming Licensees, their Service Providers, and their employees,” the bureau said.

The figure is broken down as follows: P709.39 million in withholding taxes between October 9 and December 31, 2021; P409.93 million from POGOs’ gaming revenues; P89.67 million from income taxes; P5.33 million in value added tax (VAT) or percentage tax; P4.96 million in other taxes; and P3.34 million in documentary stamps tax.

“As we already have rules and regulations in place for the POGO industry, we expect POGO operations to continue and we foresee an increase in revenues arising from said activities,” the BIR said.