State-run Philippine Amusement and Gaming Corp. expressed optimism the government will not impose higher taxes on offshore gaming operators in the country to encourage them to stay here.
Pagcor chairman and chief executive Andrea Domingo said at the sidelines of the opening of the first Philippine-Asian Gaming Expo held on Friday at the SMX Convention Center in Mall of Asia, Pasay City that POGOs should still make a profit even when they were paying taxes to the government.
“Not really to overtax… but just what is rightfully… and that they could still make a profit enough for them to stay here. Because there’s a lot of competition from other countries like in Cambodia,” she said.
She said an operator in Cambodia just needed to pay $1,000 in order to start an offshore gaming business, the same way in Vietnam. Even Laos was also thinking of opening up its gaming industry, she said.
Despite the government’s taxation of POGOs, Domingo expressed confidence those operators planning to set up shops here would not be discouraged to locate in the Philippines.
But she said some operators had already expressed their apprehension on what might happen in the future. “They were afraid,” she said.
Domingo said the taxation was fitting and those POGO operators must follow the law.
Domingo said the National Bureau of Investigation and Philippine National Police had already closed down “over 170 illegal operations” so far.
Earlier, Finance Secretary Carlos Dominguez III said the BIR was about to start collecting taxes from foreign workers this month. The government expects at least P24 billion worth of taxes annually from foreign workers employed in the offshore gaming operations in the country.
Dominguez said the initial estimate of P24 billion a year could balloon as data from government agencies showed that approximately 138,000 foreign workers were currently employed in the POGO industry.
At P2 billion a month, the amount of taxes to be collected from the POGO industry will amount to P24-billion a year—a revenue source that was non-existent some four or five years ago, before control over POGOs was given by President Rodrigo Duterte to Pagcor.
“… Roughly P2 billion a month per 100,000. Now according to the Immigration, there were 138,000 [foreign workers in the country]. I’m sure there must be more. I don’t know, apparently, my friends tell me there are a lot of guys. But I think there’s a benefit from all these discussions on tax that finally we will get the Immigrations to look at exactly who are the foreigners here,” Dominguez said.
A property consultant on Wednesday said Philippine offshore gaming operators were set to become the largest consumer of office space in Metro Manila before the end of 2019, overtaking the business process outsourcing sector despite the government’s move to tax foreign gaming workers.
Leechiu Property Consultants chief executive David Leechiu said in a news briefing the information technology-business management processing sector still led the demand for office space in Metro Manila with 244,000 square meters as of the first half. This was slightly better than Pogo’s take-up of 242,000 sq. m.