THE President has asserted the government’s right to tax Philippine Offshore Gaming Operators (POGO) should be taxed, rebuffing his own Solicitor General Jose C. Calida, who had stated that POGOs cannot be taxed.
In a statement Tuesday, the President’s Spokesman Salvador S. Panelo said the government is authorized to tax POGOs by the National Internal Revenue Code (NIRC), which will generate up to P45 billion in additional revenue each year, according to the government’s top economic planner.
Mr. Calida had determined that POGOs operating in the Philippines derive their income from overseas, and are not subject to Philippine tax.
“While the matter is being studied at length by the DoF (Department of Finance), what is clear is that the State cannot be denied its right to collect on all applicable taxes on any entity or individual. This is particularly true with regard to the case of individuals working in these companies for certainly, their compensation, salaries or wages for the services they render here are considered taxable income under Section 23 (A) & (D) of the NIRC,” he said.
“In order to defray the expenses of the government, the State has, among its inherent powers, the authority to tax.”
Mr. Panelo, who is also President Rodrigo R. Duterte’s legal adviser, added that POGOs registered as domestic corporations are subject to Philippine tax as outlined in Section 23 (E), Chapter 2 of the NIRC. Foreign-registered POGOs are subject to tax on income earned within the country, under Section 23 (F) of the NIRC’s Chapter 2.
“We trust that the DoF, together with the BIR (Bureau of Internal Revenue), has the competence to evaluate the respective charters and operations of these entities in order to subject them to Philippine taxes in accordance with the law,” he added.
House Bill No. 5267 aiming to tax POGOs was approved Monday by the House Committee of Ways and Means. The bill will be discussed next at plenary level.
Representative Jose Ma. Clemente S. Salceda of Albay’s second district, who chairs the House Committee on Ways and Means, said in a statement Monday that a 5% franchise tax will be imposed on winnings of POGOs. POGOs also can only receive licenses after they have registered with the BIR. A 25% withholding tax will be imposed on POGO workers who earn a minimum of P600,000 per annum.
Speaking with reporters Tuesday, Socioeconomic Secretary Ernesto M. Pernia said taxing POGOs which generate P45 billion in additional revenue each year. “We have to tax the POGOs. We will have to do that… (P45 billion) is not coffee money.” — Gillian M. Cortez
