The Bureau of Internal Revenue (BIR) has released the rules that will enforce a measure increasing the taxes on offshore gaming operators in the Philippines.

Under the rules, offshore gaming licensees — mostly Chinese-operated — that have failed to register or paid or even underpaid taxes will be penalized.

Under the law enacted in September, licensed offshore gaming operators will be taxed 5% on their gross gaming revenue starting next year. The law also requires foreigners working at offline gaming companies or their service provider to pay a 25% withholding tax on gross income.

The rules ask the BIR to shutter offshore gaming licensees, their gaming agents and service providers that fail to pay taxes.

The government will also slap a P20,000fine on a foreign employee who does not have a tax identification number.

Philippine offshore gaming operators must submit a list of their foreign employees and update their status or face fines.

“The BIR may recommend to other relevant agencies the revocation of the primary and other licenses obtained by POGO entities from government agencies and/or their perpetual or temporary ban in employing foreign nationals,” the BIR said.

Giving false information about their address is another violation under the law, according to the rules.

The Department of Finance earlier said they expect tax collections from the POGO industry to hit P76.2 billion from 2022 to 2023.

It said P35.1 billion would come from the 5% tax on gross gaming revenues, while P41.2 billion will come from the 25% withholding tax on foreign workers’ gross income.

Under the rules, 60% of the taxes will be used to fund the country’s Universal Health Care Act.

Meanwhile, 20% will be allotted to improve state healthcare facilities, and another 20% will go to sustainable development programs. — Luz Wendy T. Noble