Philippines gaming regulator PAGCOR could find itself subject to a massive tax hike under a tax reform package currently being considered by Congress.
According to an analysis of the Duterte government’s Comprehensive Tax Reform Package (CTRP) under House Bill 7214 in The Philippine Star, proposed tax reform includes a lowering of the corporate tax income rate from 30% down to 25% but would compensate via the rationalization of tax incentives. In particular, supporters of the bill are looking to remove an “in lieu of all taxes” incentive currently utilized by a number of prominent businesses, including PAGCOR.
Under Section 13 of Presidential Decree 1869, the gaming regulator currently pays 30% corporate income tax but just 5% franchise tax on the gross revenue derived from its operations. This 5% franchise tax on gaming operations conducted under its umbrella is “in lieu” of all other taxes and levies.
However, according to The Philippine Star, the amendment proposed by House Bill 7214 to Congress could see the incentive enjoyed by PAGCOR and its licensees “once again be subject to all applicable taxes under the Tax Code, even with respect to income generated from gaming operations conducted under its franchise.”
The new bill could also impact air transportation companies among others.
PAGCOR contributed taxes of Php8.3 billion in 1Q18, a 5.1% increase on the Php7.9 billion it paid in the prior year period.
RelatedPosts
