Dominguez orders BIR to shut down tax-dodging POGOs

MANILA, Philippines – Philippine offshore gaming operators (POGOs) evading taxes may just have run out of luck, as Finance Secretary Carlos Dominguez III directed the Bureau of Internal Revenue (BIR) to shut them down.

In a statement released on Sunday, September 15, Dominguez said POGOs and their service providers which fail or refuse to pay the tax liabilities of their foreign workers have to be padlocked.

He also noted the slow pace of collections of withholding income taxes from POGOs despite the issuance of 130 notices to these firms with tax liabilities amounting to P21.6 billion.

"Why don't we start closing them down so they will answer these assessments? Those who don't pay or respond to your assessments, clamp them down," Dominguez said. (READ: [ANALYSIS] Duterte and the POGO dilemma)

However, BIR Deputy Commissioner Arnel Guballa said the agency cannot do the job of padlocking errant POGOs alone.

He asked the assistance of the Department of Labor and Employment, the Bureau of Immigration, and the Philippine Amusement and Gaming Corporation in going after non-compliant POGOs.

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, 242% higher than the previous year's collections. 

Dominguez also wants to ensure that the payment of 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.

China has called for the Philippine government to shut down POGOs and even linked the opulent industry to money laundering and kidnapping. However, the Philippine government insisted that online gambling is "perfectly legal" in the country. (READ: Online gambling: Good for whose business?)

President Rodrigo Duterte even said that the country "needs it." – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

image