THE DATABASE of foreign workers in the Philippines will be managed by the Department of Labor and Employment (DoLE) as the government tax machine tightened its grip on foreign workers, with the online gaming industry alone expected to generate about P4.4 billion in withholding taxes.
In a statement issued by the Department of Finance (DoF), Bureau of Internal Revenue (BIR) Commissioner Caesar R. Dulay said the tax agency is working with the Department of Labor and Employment to draft a joint memorandum circular on the issuance of work permits to foreigners that provides for setting up the database.
“To effectively pursue our mandate (of taxing foreign workers), we need accurate data on foreigners working in the Philippines,” Mr. Dulay said during a recent Executive Committee meeting.
The BIR has also sent out 29 letter-notices to Philippine Offshore Gaming Operator (POGO) service providers demanding the remittance of their workers’ withholding taxes worth P4.4 billion.
On the sidelines of the 2019 Pre-State of the Nation Address Economic and Infrastructure Forum Monday, Finance Secretary Carlos G. Dominguez III said the BIR will start to collect taxes this month from foreign workers employed by POGOs.
He said the government foregoes revenue of about P2 billion a month for every 100,000 POGO workers that do not pay tax, amounting to P24 billion a year.
“I talked to the BIR end of last week and they said they are already in position to start collections from foreign workers in the POGO industry,” Mr. Dominguez told reporters in Pasay City.
The Finance department said in a statement on April 1 that it led a task force to consolidate data on POGOs. The initial finding turned up 138,000 foreigners, with 54,241 holding alien employment permits and 83,760 holding special working permits.
The DoF estimates that foreign workers earning an average of $1,500 per month and taxed at 25% of gross income can generate P32 billion in taxes each year.
In April, BIR Deputy Commissioner Arnel SD. Guballa told reporters that an inter-agency task force including DoLE is addressing the problem of untaxed foreign workers.
“DoLE will now require foreigners, before they are given work permits, to obtain a Tax Identification Number from the BIR,” he said.
The Philippine Amusement and Gaming Corp., which regulates the POGO industry, warned the offshore gaming operators last month to “strictly comply with all the rules, regulations and directives of all other government agencies.” — Karl Angelo N. Vidal