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Govt loses P3b in monthly tax from online gaming

Finance Secretary Carlos Dominguez III said Wednesday he expects to collect P3 billion worth of income tax each month from foreign nationals working in Philippine offshore gaming operations.

“The rough calculation is supposing there are 100,000 people earning $2,500 a month which is not that big [and] tax there is 25 percent, $600 more or less. $600 times 100,000 people is ... $60 million a month that we seem not to be collecting,” Dominguez said at the sidelines of a business forum at the Dusit Thani Hotel in Makati City. 

Finance Secretary Carlos Dominguez III
“All foreigners should be taxed, not just Chinese,” Dominguez said, as he clarified that the government was not focusing on particular nationalities who were working in the so-called Pogos.

He said the planned collection of income tax from foreign nationals was just right because “Filipinos are also taxed abroad.”

The Finance Department earlier said it would ensure that foreign nationals working in Philippine offshore gaming operations were paying their income taxes.

It said it was working closely with the Bureau of Internal Revenue and other government agencies, including the Justice and Labor departments to make foreign nationals working in Pogos comply with the tax laws, particularly in the payment of income taxes.

Under Revenue Memorandum Circular No. 78-2018, all foreign and Philippine-based gaming operators, including those with offshore licenses, are required to register with the BIR as a prerequisite in the renewal of their Philippine Amusements and Gaming Corp. licenses. 

This mandates the BIR to identify and monitor tax payments including remittances of taxes withheld on foreign nationals working for them. 

Dominguez said the list of foreign nationals working for service providers of Pogo operators should be consolidated and  reconciled by the various agencies and offices.

“If we get all that [information], then it is possible that we can begin to  collect taxes, enforcing the law on these foreign workers who are operating here.  Isn’t that what we really want to do here, enforce the law?” Dominguez said during a recent meeting with the respective heads of various agencies.

Dominguez said “a good starting point” would be to trace the employers of these foreign workers so that a portion of their salaries could be withheld and turned over to the government as partial payment of their income taxes.    

BIR deputy commissioner Arnel Guballa said the agency listed 54 Pogo licensees, of which 10 were local firms and 44 were offshore operators. Only seven local operators and eight offshore licensees were registered with the BIR.

Justice Secretary Menardo Guevarra said that as of June 2018, less than 95,000 foreign nationals were issued by the Bureau of Immigration with various forms of  temporary work permits as Pogo employees.

Topics: Finance Secretary Carlos Dominguez III , income tax , online gaming , foreign nationals , Philippine offshore gaming operations , Pogos
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