MANILA, Philippines — The Bureau of Internal Revenues (BIR) has advised Philippine offshore gaming operators (POGOs) to take seriously the government’s new rules on tax payments after the agency noted that only a negligible number of POGOs have made efforts to comply with the regulations issued last week.
“Failure to comply will result in the denial of the issuance of a BIR clearance for resumption of operations,” said BIR Deputy Commissioner Arnel Guballa, head of the agency’s task force on POGOs.
Also, “submission of falsified or fraudulent documents shall result in the denial” of the mandatory BIR tax clearance, Guballa said.
Guballa issued the warning as Internal Revenue Commissioner Caesar Dulay noted that very few POGOs and their service providers have moved to comply with the regulations issued on May 7.
Asked by the Inquirer how many Pogos had yet to settle their mandatory tax payments, Dulay said, “Many, almost all of them.”
60 licensed Pogos
Early this year, about 60 POGOs were issued licenses to operate by the state-run regulator Philippine Amusement and Gaming Corp. while 218 Pogo service providers employing more than 108,000 foreigners — mostly Chinese — have registered with the BIR.
The service providers are usually contracted by Pogo licensees to serve their clients — online gamblers outside the Philippines, mostly in China.
On Saturday, the Department of Finance (DOF) reiterated that the BIR issued Revenue Memorandum Circular No. 46-2020, signed by Dulay on May 7, laying down strict rules on how POGO licensees, as well as service providers, can obtain clearance to restart operations.
“According to the set of guidelines and requirements issued by the BIR, all POGO licensees or operators should first show proof that they have already paid their 2019 franchise taxes, their withholding taxes due for the months of January to April this year, as well as the first-quarter payments of their 2020 franchise tax, before they would be given tax clearances allowing them to resume operations,” the DOF said.
“POGO service providers, meanwhile, are similarly required to submit proof that they have paid their 2019 income taxes; and remitted and paid withholding taxes for the months of January to April this year, including the 25-percent final withholding tax due from their foreign employees, before the BIR would give them tax clearances to reopen for business,” the DOF added.
According to the DOF, even tax-compliant service providers “would not be issued tax clearances by the BIR should their Pogo, or licensees fail to comply with the bureau’s new requirements.”