POGO debate focuses on tax take

MANILA, Philippines — While House representatives debated the propriety of allowing Philippine offshore gaming operators (POGOs) to resume business, they at least agreed to compel POGOs to pay their tax deficiencies before being allowed to reopen.

Albay Rep. Joey Salceda, chair of the House ways and means committee, argued that POGOs could be a source of funds for the government’s campaign against the new coronavirus disease (COVID-19).

Salceda said the monthly tax take from Pogos could reach as high as P2 billion and he drafted House Bill No. 5267 that would impose a 5-percent gross receipts tax and a 25-percent tax on Pogo employees earning more than P600,000 a year.

But Deputy Speaker Eddie Villanueva, representative of the anticorruption party list Cibac and leader of Jesus is Lord Church, said the policy was “incoherent” because the government couldn’t even collect tax deficiencies.

Villanueva questioned the wisdom of allowing Pogos to resume operation in the guise of raising tax revenues when that could be done simply by compelling the companies to pay their dues.

“If the government wants additional cash for its pandemic response efforts, it should just make Pogos pay its tax delinquencies and other obligations to public coffers. Period,” he said.

“Why allow them to continue their business when it will clearly put at risk the entire efforts of the government to contain the spread of COVID-19 virus?” he said.

“The entire country is enduring lockdown and other more essential industries are mandated to stop just to arrest this pandemic, then … we will allow an industry which barely benefited us to resume business and make profits again,” Villanueva said.

While the government claims that Pogos can contribute P600 million in taxes a month, a Senate hearing on Pogos early this year revealed that a number of these companies owe the government almost P50 billion in tax obligations, Villanueva noted.

“It’s just baffling why the government seems … ‘obliged’ to help this gambling industry operate amidst this crisis,” Villanueva said.

But Salceda argued that was a matter of enforcement on the part of the executive department.

“Of course, the tax and regulatory agencies will have to make that guarantee that they can enforce,” he added.

“You can even use the question of whether Pogos should be allowed to reopen as an opportunity to collect tax liabilities. We can make granting the permission to reopen conditional on settling existing tax liabilities,” Salceda said.

He acknowledged public anger toward the government’s announcement that it might partly lift restraints on Pogo operations by allowing about 30 percent of their workforce to go back to business.

“I think part of the public sentiment against Pogos stems from the observation that we are not getting our fair share in taxes out of the industry,” Salceda said.

But he noted that Pogos “are not illegal under the law… [and] the most immediate concern is how to get the revenues from them,” Salceda said.