Pagcor cautions House from imposing higher tax on POGOs

MANILA, Philippines — Imposing higher taxes on Philippine Offshore Gaming Operators (POGOs) may discourage gaming companies to operate here, thus hurting government revenues, an official of the Philippine Amusement and Gaming Corporation (Pagcor) warned Monday.

During the hearing of the House ways and means panel, Pagcor’s Senior Manager for Policy Development Jessa Fernandez said online gaming companies might leave the Philippines if they find a country that offers better taxes, thereby cutting the “increasing” revenues of the government.

“Imposing higher gaming taxes forces the operators to lower the odds or stakes in their games to cover for the cost of the taxes,” Fernandez also said, stressing that they still support the proposal to codify and clarify the taxes imposed on POGOs.

“With lower stakes, players are discouraged, thereby protecting their citizens from getting too much embroiled in online gaming,” she added.

READ: House bill codifying, clarifying taxes on POGOs filed

Fernandez also clarified that the government is currently imposing regular corporate income taxes on employees of POGOs, and other taxes imposable to domestic corporations.

House Bill No. 5267 of Albay 2nd District Rep. Joey Salceda proposed that foreign individuals employed and assigned in the Philippines by an offshore gaming licensee would be given a 15 percent tax on salaries, wages, annuities, compensation, remuneration and other emoluments like honoraria and allowances from the operator.

The foreign employees will also follow other pertinent tax rules when it comes to his or her other sources of income in the Philippines.

The bill also hikes to 5 percent, from the current 2 percent, the tax imposed on all offshore gaming companies on gross receipts collected from its operations covered by the law granting their franchise.

Ban POGOs

Questioning the growing presence of Chinese individuals in the country, Minority Leader and Manila 6th District Rep. Bienvenido Abante Jr. meanwhile proposed the ban of POGOs in the country.

“If we are not going to really tax the POGO thing let’s scrap it altogether. The government does not need any kind of gaming that cannot be taxed… We do not want a lot of Chinese people in this country anyway,” he said during the hearing.

Tax incentive?

Marikina City 2nd District Rep. Stella Quimbo meanwhile warned that imposing a 15 percent income tax on POGO employees would effectively be lower compared to the tax imposed on Filipino employees.

“Why are we proposing a different tax rate compared to the Filipino employees?” Quimbo asked. “This would mean that those earning above P700,000 (from POGOs) would end up paying lower taxes compared to Filipinos earning the same in different industries.”

“Is this in effect an incentive being given to POGO employees?” the economist asked.

Salceda, chair of the committee, assured that they would thoroughly deliberate the bill to ensure that taxes imposed on POGOs would not be lower than the domestic rates. /je