MANILA, Philippines — Philippine offshore gaming operators (Pogos) can be taxed as they operate in the Philippines and derive income from it, a lawmaker insisted on Monday, Nov. 18.
Albay Rep. Joey Salceda, chair of the House ways and means committee, said in a statement that Solicitor General Jose Calida erred in his opinion that Pogos cannot be taxed as they earn from bets placed by foreign players.
Salceda said the work of thousands of Chinese nationals in the Pogo industry is proof that the Pogo companies derive income from their operations in the Philippines.
“The bets are made by people outside the Philippines but is enabled by manpower and facilities inside the Philippines,” Salceda’s statement said
“So there is value added or income derived here, therefore, taxable,” he added.
“Basic accounting principle: costs are recognized when revenues are recognized So aren’t the wages here costs expensed by Pogos?” Salceda said.
The Albay lawmaker also pointed out that only 10 out of 60 Pogos in the country are registered with the Bureau of Internal Revenue (BIR).
“So therefore should not the 50 registered and the 100 illegal Pogos be of similar stature?” he said.
Salceda also said the Office of the Solicitor General’s (OSG) interpretation “rises to the level of a tax exemption” — a grant which only Congress can give.
On Monday, the House committee on ways and means approved a measure which seeks to directly impose a 5 percent franchise tax on Pogos.
READ: House panel OKs bill for tax on Pogo and its workers
It will also impose a 25 percent tax on foreign nationals working for Pogos from their salaries, wages, annuities, compensation and other emoluments like honoraria and allowances from the Pogo operator and with a minimum threshold of P600,000 per annum.
Salceda said that the national government stands to earn a total of P45 billion in revenues annually should the measure be enacted into law./Edited by TSB