THE HOUSE of Representatives ways and means committee expects the proposal to tax Philippine Offshore Gaming Operators (POGO) to be approved without much difficulty in the plenary, the panel’s head said on Wednesday.

“Itong tax on POGO ibababa na ’yan sa floor (We will soon introduce the measure taxing POGOs to the floor). We expect easy, expeditious action in the plenary simply because it doesn’t affect the pockets of ordinary people,” Albay-2nd District Rep. Jose Ma. Clemente S. Salceda, who heads the committee, said in a media forum in Manila.

Earlier the same day, the Bureau of Internal Revenue (BIR) padlocked 11 branches of another POGO — Makati City-based New Oriental Club88 Corp. (NOCC) — for not being registered for tax purposes.

It is the third POGO to suffer this fate after Great Empire Gaming and Amusement Corp. last Sept. 25 and Altech Innovations Business Outsourcing on Oct. 17. Both businesses have resumed operations after making initial payments on their liabilities.

“They’re earning P600 billion… and, actually, what goes to the national government is only P400 million,” Mr. Salceda said of the entire industry, citing estimates.

SUPPORTED BY THE SENATE
The committee on Nov. 18 approved House Bill No. 5267, which in its last version proposed to impose a five percent franchise tax on all offshore gaming companies. This will be charged on top of the current two percent gross gaming revenue tax collected by the Philippine Amusement Gaming Corp. (PAGCOR).

This is also in line with the BIR’s Revenue Memorandum Circular No. 102-2017, which provides that POGOs are subject to tax.

The same House measure will also introduce a 15% tax on the salary of an individual, who is a permanent resident of a foreign country, employed by a licensed offshore gaming enterprise. The bill sets at P250,000 the minimum gross annual income for computation of tax levied on foreign nationals engaged in offshore gaming. At present, said employees are not covered by the tax code.

Even as no counterpart measure has been filed in the Senate, Senate leaders have expressed support for the move to tax POGOs

President Vicente C. Sotto III and Senate President Pro-Tempore Ralph G. Recto both replied “yes” in separate mobile phone messages when asked if they would support the House measure.

On New Oriental, the BIR said in a press release on Wednesday that “[r]esults of the investigation showed that NOCC has unregistered branches as certified by the Revenue District Office No. 052-Parañaque City, having the jurisdiction over the said branches, in violation of Section 115 (b) of the Tax Code.”

Talking to reporters, BIR Deputy Commissioner for Operations group Arnel SD. Guballa cited “violation of VAT (value-added tax requirements) and violation of non-remittance of the withholding tax” on the part of New Oriental.

According to BIR estimates, the company had a total of 23,156 foreign nationals in its employment for the taxable year ending last Dec. 31. But the business submitted to the BIR an official list of its foreign workers, totaling just 6,736 for the same period. — Charmaine A. Tadalan and Beatrice M. Laforga

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