P28.7B projected to be collected from Pogos in 2021 under tax regime bill

A windfall expected from Pogo taxes

MANILA, Philippines — An estimated P28.7-billion is projected to be collected this year from Philippine offshore gaming operators (Pogos) once the bill establishing a tax regime for the industry is enacted into law.

During the Senate interpellation on Senate Bill No. 2232, Senator Pia Cayetano said the measure could lead to the collection of P28.7 billion in gaming and withholding taxes from Pogos in 2021.

“Then for 2022, it’s P32 billion,” added Cayetano, who is sponsoring the measure as chairperson of the Senate ways and means committee.

The bill, the passage of which was recently certified as urgent by President Rodrigo Duterte, seeks to amend the National Internal Revenue Code (NIRC) to clarify the tax liabilities of Pogos.

READ: Duterte certifies Pogo tax regime bill as urgent

“We have to clarify this because some of them refuse to pay for some reason,” Cayetano said.

While Pogos has become a growing industry in the country and is generating additional revenues for the government, its proliferation in recent years shows that tax collections could have been higher, the senator previously said.

She cited data from the Bureau of Internal Revenue (BIR), which showed that Pogo collections amounted to P7.18 billion in 2020.

This, according to Cayetano, is 11.71 percent higher than the P6.42 billion collected from the same industry in 2019.

“It was estimated that the government could have collected more than P38 billion in 2019 alone, a far cry from the actual collection of the BIR,” she had pointed out.

READ: Pogo tax regime bill reaches Senate plenary

Under the proposed measure, all offshore gaming licensees, regardless of whether Philippine or foreign-based are considered doing business in the Philippines, must pay a five-percent gaming tax on the gross gaming revenue or receipts derived from their gaming operations.

Foreigners employed by offshore gaming licensees and service providers will be subjected to a 25-percent withholding tax.

The measure provides a minimum final withholding tax due of P12,500 for any taxable month.