House bill aims to legislate taxes imposed on POGOs

A measure has been filed at the House of Representatives seeking to legislate the imposition of taxes on Philippine Offshore Gaming Operations (POGO).

Albay Representative Joey Salceda filed on Wednesday House Bill 5267 which, he said, seeks to clarify whether taxes should be imposed on POGO employees, considering the proliferation of its operations in the country.

The Bureau of Internal Revenue has earlier issued Revenue Memorandum Circular No. 102-2017 stating that “the entire gross gaming receipts/earnings or the agreed or pre-determined minimum monthly revenues/income from gaming operations under existing rules, whichever is higher, shall be subject to a franchise tax of 5%, in lieu of all kinds of taxes, levies, fees or assessments of any kind, nature or description.”

Still, Salceda said there should be a law that settles questions on POGO's taxability to "once and for all address confusion on the taxation of this emerging industry."

"As POGOs are companies doing business in the Philippines, their employees’ income shall be subject to tax," said Salceda, who also chairs the House Committee on Ways and Means.

Salceda said a clear and definitive tax regime for POGOs will be a potent source of revenue for the government. At the same time, it will also put POGO facilities under stricter oversight.

"Codifying the tax regime for POGOs will provide the government a broader set of levers with which to monitor and oversee the industry and to stabilize the gyrations in tax revenue intake and enforcement," he said.

Under the measure, a foreign individual employed and assigned in the Philippines by an offshore gaming operator or licensee should pay a 15% tax of the salaries, wages, annuities, compensation, remuneration and other emolutions like honoraria and allowances from the operator.

Pertinent income tax will also be imposed on any income earned by the foreign POGO employees from all other sources in the Philippines.

At the same time, the measure also imposes a 5% tax on all offshore gaming companies on gross receipts collected from its operations covered by the law granting their franchise.

Finance Secretary Carlos Dominguez has already expressed support for the proposal to legislate a 5% tax on POGO revenues.

“Yes, I haven’t seen the exact proposal, but in general, yes. I think that’s a good idea,” Dominguez said last week. — BM, GMA News