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BIR year-to-date collections from POGOs hit P4.4B as of August 2022

Tax collections from Philippine Offshore Gaming Operators (POGOs) for the first eight months of the year surpassed the full-year revenues for 2021, the Bureau of Internal Revenue (BIR) reported on Monday.

During a Senate hearing, BIR Director Atty. Sixto Dy Jr. said the agency collected P4.438 billion from January to August of the year, up from the P3.91 billion collected for full year 2021.

Last year’s collection fell short of the P32.1-billion goal, in line with Republic Act 11590 or the POGO Law, signed in September 2021 by then-President Rodrigo Duterte.

In a letter to the Senate, the BIR said the projections for 2021 were based on the assumption that POGO operations would return to pre-COVID-19 levels.

These were also made before the exodus of POGO entities and the foreign nationals employed in the sector.

“However, contrary to the lofty expectations, POGO entities have not returned to the Philippines and the number of foreign nationals employed by POGOs have not reached its pre-pandemic levels but drastically decreased…” it said.

Data presented by the BIR showed that there were a total of 163 POGO entities in the country as of June 2022, comprising 35 licensees and 130 service providers.

It noted, however, that only 26 of the licensees and only 127 service providers were operational.

In terms of the number of workers in the POGO industry, there were a total of 34,245 in the POGO industry as of June 15, 2022 made up of 17,509 foreign nationals and 16,736 Filipinos.

This is higher than the 30,583 individuals employed in the industry last year; the 42,385 individuals in 2020; and the 144,605 individuals in 2019.

The BIR attributed the failure of the POGO industry to return to pre-pandemic levels to the transfer and relocation of entities to other countries such as Dubai in the United Arab Emirates and in Vietnam, the change in the taxing regime, and the ongoing crackdown of the Chinese government against online gambling.

For its part, the Philippine Amusement Gaming Corp. (PAGCOR) said total income stood at P1.912 billion from January to August, including P1.333 billion from offshore gaming operations, and P578.863 million from other related fees.

This compares with P3.466 billion total income collected in 2021; P5.279 billion in 2020; and P8.021 billion in 2019.

The Philippine government last month announced plans to deport at least 2,000 POGO workers by October, in line with the crackdown on undocumented foreign workers in the country.

Finance Secretary Benjamin Diokno last month said the country should do away with POGOs, citing “social” and “reputational” risks.

Diokno said that revenues from POGOs have already started to decrease, estimated at P3.9 billion in 2021 from P7.2 billion in the previous year.

The DOF in September 2019 already threatened to shut down POGOs with tax liabilities, with uncollected withholding income taxes then estimated at P21.62 billion. A number of POGOs have since been closed. —KBK, GMA News