DoF estimates P22.5B/year foregone from illegals

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Carlos G. Dominguez III
‘We have to go after these guys because they are not paying taxes, simple.’ -- Finance Secretary Carlos G. Dominguez III

THE FINANCE DEPARTMENT is pressing for a more aggressive campaign against unregistered foreign workers in Philippine offshore gaming operations (POGO) in the belief that the government has been missing out on P22.5 billion in income taxes yearly.

In a statement, Finance Secretary Carlos G. Dominguez III gave a March 29 deadline for an inter-agency task force to draw up the list of foreigners employed by POGO firms.

“There are still gaps in the numbers and we need to close those gaps. In our computations, there is at least P22 billion a year not being collected in the income taxes from these POGO workers who could possibly exceed 100,000 in number,” Mr. Dominguez was quoted as saying during the body’s meeting last week.

A POGO is a business that provides games, takes bets and pays winners through an online gaming account.

Preliminary Bureau of Internal Revenue (BIR) data showed there are 33,000 foreign workers employed by 64 POGO companies, out of 205 service providers operating here. This means an average of 515 foreigners per POGO unit, or about 103,000 for the entire sector, said BIR Deputy Commissioner Arnel S.D. Guballa.

News reports back in China — which is among the biggest source of POGO workers here — cite an average monthly pay of 10,000 yuan or P78,000. Mr. Dominguez said this translates to P18,750 in monthly taxes per worker, computed at 25% average rate for foreigners, or P22.5 billion yearly.

This is in contrast to Philippine Amusement and Gaming Corp. (Pagcor) reports that POGOs pay foreign workers about P35,800 per month. The Finance chief said this was not attractive enough to lure foreign nationals to work here.

“We have to go after these guys because they are not paying taxes. Simple,” Mr. Dominguez said.

The Finance department has asked Pagcor to require POGOs to register with the BIR before they are given a license to operate here.

Some lawmakers have cited the increasing presence of foreign POGO workers — many of them Chinese — saying they appear to be taking away jobs that can otherwise be performed by Filipinos.

Chinese POGO workers are seen to be driving demand for residential properties, particularly in the Manila Bay area.

The task force is composed of representatives of Pagcor, Department of Labor and Employment (DoLE), the Securities and Exchange Commission, the Bureau of Immigration (BI), as well as regulators of economic zones in the country.

Preliminary figures show that DoLE has handed out 54,241 alien employment permits, while the BI has granted 59,000 working visas and 83,700 special working permits to foreigners. — Melissa Luz T. Lopez