State-run Philippine Amusement and Gaming Corp. expressed its full support to the government’s crackdown on Philippine offshore gaming operators that were dodging tax payments.
PAGCOR said it was fully cognizant of the legal authority of the Bureau of Internal Revenue under the Department of Finance to close down tax-evading establishments.
The gaming regulator said it issued letters to all POGOs and service providers to comply with the law.
Finance Secretary Carlos Dominguez III earlier asked the BIR to shut down the operations of POGOs and their service providers that failed or refused to pay the tax liabilities of their foreign workers and to file the appropriate cases against the tax-dodging firms.
Dominguez issued the order after learning from the BIR during a recent DOF executive committee meeting of the slow pace of collections of withholding income taxes from POGOs despite the issuance of 130 letter-notices to these firms with tax liabilities amounting to P21.62 billion combined.
“Why don’t we start closing them down so they will answer these assessments,” Dominguez said during the interagency meeting.
BIR deputy commissioner Arnel Guballa reported that POGO service providers paid P175 million in withholding taxes in 2017 and P579 million in 2018. From January to August 2019, the BIR collected P1.4 billion from POGOs, representing a 242-percent increase from the previous year’s collections.
“Those who don’t pay or respond to your assessments, clamp them down,” Dominguez asked the BIR.
Dominguez told the BIR to ensure that the payment of the tax liabilities should account for each foreign worker in POGOs and to reject any “lump sum” offer or any other arrangement in paying their tax arrears.
“The collection should be per individual,” the Finance chief said. “You force the issue and you bring them to court. I mean, close them down,” Dominguez told Commissioner Caesar Dulay and Guballa during the Execom meeting.
PAGCOR said among the measures it was undertaking to hold POGO licensees accountable if they reneged on their financial obligation included the imposition of interest on outstanding arrears, forfeiture of the performance bond, the imposition of demerits/administrative sanctions and charging of cash penalty, the cancellation of license and endorsement to the legal division for proper collection efforts.
PAGCOR also said no licenses would be issued to new POGO applicants. “While PAGCOR ensures that the government gets its proper and legal taxes from these POGOs, it would like to reiterate that the moratorium on the issuance of licenses to new POGO applicants that it earlier implemented continues,” the gaming agency said.
BIR deputy commissioner Arnel Guballa asked the assistance of PAGCOR, the Department of Labor and Employment and the Bureau of Immigration in closing down errant POGOs.