PH’s potential revenue through Pogo taxes could reach P65B — Recto

MANILA, Philippines — The potential revenue of the country from Philippine Offshore Gaming Operators (Pogos) could reach as high as P65 billion in taxes, Senator Ralph Recto said Thursday.

“Two-percent regulatory fee would be equivalent to P10.8 billion. The five percent franchise tax which is suggested or in the law—and we are now putting it in the bill here—would have been P27 billion. And the withholding tax from 183,000 [estimated Pogo] employees would have been P27.5 billion, for a total of P65 billion. That’s how huge the potential revenues are from this industry,” Recto said during the hearing of the Senate Committee on Ways and Means on various bills dealing with taxes for Pogos.

“In fact… based on all information at this point in time, the total global industry is P60 billion, mostly also in the Asia Pacific region and it would appear that the Philippines is the only one in the region operating and we probably have a huge market share of that,” he added.

Recto also said that “the total of which that the government should have earned in 2019 with gross gaining revenue of P287 billion would have been roughly P38 billion.”

“What I am only trying to establish here is how much the potential government collections should be if we were to follow the recommendations under the law,” he said.

“Of course it is not my desire to tax them to death. The idea is to nurture them but be able to collect the taxes also at the same time,” the senator added.

According to Bureau of Internal Revenue (BIR) Deputy Commissioner Arnel Guballa, tax collections from Pogos in January this year was only at P327 million, a figure significantly lower than the P1.043 billion collection in the same month in 2020.

This means there was a decrease of P715 million or 68.63 percent in the tax collection for the said period.

Based on the January data, Guballa said the BIR is expecting to collect P3.92 billion in taxes from Pogos for the entire 2021.

“The total projection for Pogo revenues for taxable year 2021 is P3.92 billion based on the January voluntary payments that they have made. The amount is based on the January actual collection multiplied by 12 months. This is just an estimate,” he explained.

According to the BIR official, the tax collections from Pogos was at P7.1 billion in 2020, which is P752 million or 11.71 percent higher than the P6.4 billion in 2019.

A total of 38 Pogo licensees are currently operating, according to the Philippine Amusement and Gaming Corporation (Pagcor).

Dominique Tutay, Assistant Secretary at the Department of Labor and Employment (DOLE), said Pagcor has issued authority to resume operations to 160 Pogo establishments in 2020.

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JE