The government is eying collecting at least P24 billion in taxes annually from the foreign workers employed in the offshore gaming operations in the Philippines, Finance Secretary Carlos Dominguez III said Monday.
He said the government planned to collect the taxes starting this month, and the initial estimate of P24 billion a year could balloon as the data from government agencies showed that about 138,000 foreign workers were now employed in the POGO or Philippine offshore gaming operations industry.
“I have just talked to the BIR at the end of last week and they said they are already in place to start collections from foreign workers in the POGO industry,” Dominguez said at the sidelines of the 2019 Pre-SONA (State of the Nation Address) Economic and Infrastructure Forum at the Philippine International Convention Center in Pasay City.
“They said they will start making the collections in July.”
Dominguez cited his department’s estimates that, assuming there were 100,000 foreign workers in the industry, the tax collections from them could hit P2 billion a month or P24 billion a year.
The revenues to be collected from the POGO industry were non-existent some four or five years ago, before the control over it was given by President Rodrigo Duterte to the state-run Philippine Amusement and Gaming Corp.
“Roughly P2 billion a month per 100,000. Now, according to Immigration, there are 138,000 [foreign workers in the country]. I’m sure there must be more,” Dominguez said.
“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 Immigration to look at exactly who are the foreigners here.”
The Finance department said in April it wanted to collect an estimated P32 billion in annual income taxes from the foreign nationals working for Philippine online gaming operators or POGOs.
It said some 138,000 foreign nationals were working for POGOs, and on the assumption that each foreign national earned an average of $1,500 a month and taxed at 25 percent of gross income, a total of P32 billion a year could be collected from them.
The number, however, does not include data from the Philippine Economic Zone Authority and the special economic zones in Bataan and in Aurora.
Last month, PAGCOR warned offshore gaming operators to strictly comply with the regulations and pay the correct taxes to the government, saying the tax agencies were monitoring how they were conducting business in the country.
“Let this serve as a final warning for everyone to strictly comply with all the rules, regulations and directives of all other government agencies which may have jurisdiction over the other aspects of your operations,” Jose Tria Jr., Pagcor Philippine Offshore Gaming Operators vice president, said in a statement.
“Finally, for those under-declaring the income tax of their employees, be sternly warned that you will be placed under strict scrutiny by the Bureau of Internal Revenue for such actions.
“The practice of declaring income tax below industry standards will not be tolerated by the BIR and will be dealt accordingly.”