23 October 2019

Philippines government considering new 5% tax on POGO gaming revenues

(Philippines).- Philippine authorities are considering a proposal to hit Philippine Offshore Gaming Operators (POGOs) with a new 5% tax on gaming revenues.

The proposal, put forward by House of Representatives member Joey Salceda earlier this month, would see POGOs classified as resident corporations and therefore subject to an additional 5% franchise tax on top of current tax and fees. Salceda is also pushing for a gaming tax of US$10,000 per table for firms offering live betting and US$5,000 per month for RNG-based games.

The concept this week received support from both PAGCOR and the Department of Finance, with Finance Secretary Carlos Dominguez stating, “I haven’t seen the exact proposal, but in general, yes. I think that’s a good idea.”

PAGCOR chair Andrea Domingo also told GMA News that the regulator “has approved a new method/formula of computing the minimum guarantee fee (MGF) so that it will yield more than double of the existing MGF – that will be a 100% revenue increase,” over current taxation levels.

The Philippines Bureau of Internal Revenue recently revealed that it had collected Php1.63 billion (US$32 million) in taxes from POGOs between January and August 2019, with official figures putting the number of registered POGOs at 218 and the number of foreign workers employed by them at 108,914.

Meanwhile, a POGO firm that was shut down last week for withholding taxes has been allowed to reopen after making partial payment of its debts.

Altech Innovations Business Outsourcing was given permission to reopen this week after paying an initial Php8.2 million (US$160,000) payment to the Bureau of Internal Revenue and committing to pay the remaining Php37 million (US$723,000) it owes within 30 days. It is the second POGO to be allowed to reopen after being shut down by authorities.