The Bureau of Internal Revenue sent a clear message to Philippine offshore gaming operators, or POGOs, when it closed down the operations of a big company the other day for violating the country's tax laws.
Officials of the Department of Finance and the BIR padlocked the offices of Great Empire Gaming and Amusement Corp. in Eastwood City, Quezon City the other day, and were set to shutter its other workplaces in Parañaque and Subic.
Great Empire also has other issues with the Quezon City government. It was one of the POGO operators that received a notice of violation from Quezon City for failing to present an environmental clearance and sanitary and employees’ occupational permits. Great Empire operated from the fourth to the 19th floors of an unfinished building in Quezon City.
The BIR found out that Great Empire did not register its operations for value added tax purposes. The operator, employing around 8,100 workers and a few hundred more in Parañaque and Subic, is clearly not paying VAT to the government.
The DOF and the BIR also have estimated that the government can collect at least P2 billion in personal income taxes a month from foreign workers. Finance Secretary Carlos Dominguez III earlier this month warned that the government would start closing down offshore gaming operations that were not complying with tax laws in the country.
POGOs have generated controversy in the Philippines because of the huge number of Chinese workers being hired by operators. The Chinese Embassy in August urged Manila to crack down on Pogos, saying several Chinese citizens were illegally recruited and hired in offshore gaming operations in the Philippines.
State-run Philippine Amusement and Gaming Corp. in response stopped accepting new applications for offshore online gaming licenses in August after Beijing expressed its concerns. PAGCOR said 58 licensed offshore gaming operators were in the country and that three more applications were pending consideration.
The government, meanwhile, is studying the impact of POGOs on the general economy. But Bangko Sentral ng Pilipinas Governor Benjamin Diokno said initial results of a study conducted on Pogos showed they would not have an impact on financial stability in case of a pullout from the country.
POGOs have benefited the country's property sector and are contributing to consumer demand. Like any business operations, however, they should toe the line, respect the country's tax laws and operate responsibly.