BIR relaxes rules for POGO clearance application, resumption of ops

The Bureau of Internal Revenue (BIR) has revised the rules for Philippine offshore gaming operators (POGO) licensees’ and service providers’ application for tax clearance and for the resumption of operations amid community quarantine implemented to contain the COVID-19 spread.

In May, the government allowed POGO licensees and their service providers to resume operations, albeit at 30% workforce, provided they follow precautionary measures and are cleared by the BIR as tax compliant.

The taxman released on Friday Revenue Memorandum Circular (RMC) No. 64-2020, dated June 24, which revised RMC No. 46-2020 or the “Guidelines and Requirements for POGO Licensees and Service Providers for the Processing of their Application for a BIR Clearance in Connection with the Resumption of Operations.”

For the conditions for POGO licensees, the RMC 64-2020 removed the specific periods covered for the submission of proof of payments and payment of franchise tax.

The earlier circular specified that POGO licensees must submit copies of 2019 and first quarter of 2020 franchise tax quarterly returns and proof  of payment.

The new circular also removed the specific months covered for the remittance or payment of withholding taxes and added the phrase “if applicable.”

The previous circular required POGO operators to remit and pay withholding taxes due from January to April 2020.

For POGO service providers, the new BIR circular removed the inclusion of “25% final withholding tax due from their foreign employees” which the previous order required to be remitted and paid from January to April 2020.

Finance Secretary Carlos Dominguez III said the DOF is now looking into claims that only two POGO firms have paid taxes as a requisite to resume operations, but it said such claims are "probably true."

The BIR had said legal issues are hampering the collection of franchise taxes from POGOs. The firms have claimed they should not be subjected to such taxes as they are non-resident corporations.

Dominguez said government revenues from POGOs should reach as much as P20 billion per year but collections only reached P6 billion in 2019.

The Finance chief said collections from POGOs only share a small part in government revenues. 

He said collections from POGOs amounted to P6 billion in 2019, and P1 billion in the years prior to that. —Ted Cordero/KG, GMA News