Finance Secretary Carlos Dominguez III on Saturday (Aug. 10) expressed confidence China’s concerns over online casinos in the Philippines catering to Chinese gamblers, which Beijing had declared as illegal, would be resolved by Philippine President Rodrigo Duterte and Chinese President Xi Jinping when they meet later this month.
Doiminguez said he was “certain” that the Philippine government was “addressing the issues raised” by the Chinese Embassy in Manila in a recent statement.
The embassy last week issued a statement saying “any form of gambling by Chinese citizens, including online gambling, gambling overseas, opening casinos overseas to attract citizens of China as primary customers, is illegal.”
It said online casinos that had mushroomed in the Philippines had also employed Chinese citizens “illegal recruited and hired.”
It said Chinese citizens were being lured into Philippine offshore gaming operators, or Pogos, “with only tourist visas.”
The Philippine Amusement and Gaming Corp. (Pagcor), the Philippine government gambling regulator, had announced the establishments of Pogo hubs for Chinese online casino workers and had written the Chinese embassy to explain what those hubs are.
Oriental Game—one of the country’s leading online casino operators—was building two massive Pogo hubs in Cavite and Clark with over P8 billion in investments to also serve as a one-stop shop for foreign workers to secure clearances from the government.
Pogos that will operate in these hubs will be given five-year gaming licenses by Pagcor.
The hubs will also host offices for Pagcor, the Bureau of Immigration (BI), and the Bureau of Internal Revenue (BIR).
The strongly worded Chinese embassy statement came after Duterte said he will invoke the arbitral ruling on the West Philippine Sea during an official visit to China this month.
Dominguez said last week that the government will continue to collect personal income taxes due from foreign—mostly Chinese—workers in the Pogo sector, while also issuing tax identification numbers (TINs) to the majority of them who were still unregistered.
“The Department of Finance (DOF) and the BIR are focused on enforcing the Tax Code by requiring all foreigners with Philippine sources of income, to register and to fully meet their tax obligations,” Dominguez said.
The DOF earlier reported that the BIR already collected P186 million in personal income taxes withheld from Pogo workers last month, with P170 billion more to be remitted to the country’s biggest tax-collection agency this month.
Finance Assistant Secretary Dakila Elteen M. Napao last week said the BIR had issued to 48 Pogos notices demanding payment of their workers’ taxes, with 22 firms that replied or protested the tax assessment sent to them.
Napao said the additional P170 billion in collections would be received by the BIR on Aug. 10, this month’s income tax remittance deadline.
At last week’s Cabinet meeting, BIR Commissioner Caesar R. Dulay reported to Duterte that the taxes collected from Pogo service providers have been increasing since 2017.
From P175 million in 2017, the taxes remitted by Pogo service providers climbed to P579 million in 2018 and further jumped to P789 million in the first six months of 2019, Dulay said.
Pogos should withhold the monthly 25-percent personal income tax due from all their workers, including those who have yet to obtain TINs.
Service providers must later on remit these taxes to the BIR when their workers already have TINs
Dominguez had said they will collect P2 billion per month in additional tax revenues from all Pogo workers.
However, the BIR had been having difficulty in issuing TINs because of the sheer number of Chinese workers in Philippine online casinos, which is close to the manpower of the entire Philippine National Police.
In July, the BIR issued 10,000 TINs even as the government had estimated as many as 130,000 unregistered Chinese working in the Pogo industry.
An interagency joint memorandum circular issued last July also required all foreign workers to secure visas, working permits, and TINs before entering the country.
In terms of gaming revenues, the Pogo sector was expected to generate P8 billion this year, bringing the total to P20 billion in just three-and-a-half years, Domingo said in July.
Between 2016 and 2018, Pogos already contributed P11.9 billion in gaming revenues to government coffers, up from only P56 million yearly in the past, Domingo had said.
At present, there were 59 Pagcor-licensed Pogos operating in the country, according to Domingo./TSB