House panel OKs bill imposing taxes on POGOs

The House Committee on Ways and Means on Monday approved the measure directly imposing a 5% franchise tax on Philippine Offshore Gaming Operations (POGOs).

During its meeting, the panel approved House Bill 5267 filed by its chair, Albay Representative Joey Salceda, which also aims to legislate the imposition of taxes to POGOs, considering the proliferation of its operations in the country.

According to the approved version by the committee, a 5% franchise tax will be imposed directly on gross winnings of POGOs licensed by the Philippine Amusement and Gaming Corporation.

House ways and means panel tackles measures creating OFW hospital, taxing POGOs. @gmanews pic.twitter.com/xDmuXvFQTP

— Erwin Colcol (@erwincolcol) November 18, 2019

Salceda, in an interview with reporters, said PAGCOR currently collects 2% franchise tax from POGOs, generating an annual P8 billion revenue for the government.

"Essentially with this measure, PAGCOR will collect P20 billion and we are asking them to... remit everything to BIR (Bureau of Internal Revenue)," he said.

At the same time, the measure mandates a foreign individual employed and assigned in the Philippines by an offshore gaming operator or licensee to pay a 25% tax of the salaries, wages, annuties, compensation and other emolutions like honoraria and allowances from the operator at a minimum threshold of P600,000 per annum.

"This measure essentially tells PAGCOR that before you issue license, you must require BIR registration," Salceda.

With the taxes to be imposed on POGOs, Salceda said the national government is set to earn a total of P45 billion in revenues yearly.

"The probability of gaining or winning in any casino is 18%. So gross winning there is 82%, so what's the 5%? It's definitely a very proportional and reasonable," he said.

Finance Secretary Carlos Dominguez has earlier expressed support to the proposal to legislate a 5% tax on POGOs.

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