Philippines President Rodrigo Duterte has signed into law a new bill aimed at closing gaps in its Php165 billion (US$3.41 billion) COVID-19 relief fund, including new tax rules that will more than double revenues from Philippine Offshore Gaming Operators (POGOs).
Under the new Bayanihan to Recover as One Act, also known as Bayanihan, all “offshore gaming licensees, including gaming operators, gaming agents, service providers and gaming support providers” would be subject to a 5% tax on turnover rather than revenue. Money owned will be calculated on the peso equivalent of any foreign currency used based on the official exchange rate at time of payment to ensure POGOs can’t under-declare their income.
Those who don’t comply will be stripped of their licenses by gaming regulator PAGCOR.
“The Bayanihan 2 will more than double the tax collection from POGO, from Php7 billion (US$144.5 million) estimated collection in 2019 to approximately Php17.5 billion (US$361.2 million) this year because of the reforms we have introduced in the measure,” said House Minority leader Franklin Drilon in an interview with local radio station DWIZ.
“All revenues from POGO will be used to fund the various types of assistance laid out in the Bayanihan 2 for all sectors affected by the pandemic.”
Dilon confirmed that the 5% franchise tax applied to POGOs should be applied to either the gross bets or turnovers or pre-determined minimum monthly revenues from gaming operations, whichever is higher.
The Philippines has been looking to crack down on any POGOs failing to meet their tax obligations, with only 29 of 60 official licensees having been granted permission to resume operations since the lifting of a ban on all operations during the early days of the COVID-19 pandemic.
PAGCOR and the Bureau of Internal Revenue (BIR) announced in early May that all POGOs and their service providers must fulfil certain prerequisites before being given the green light to resume, including settling any outstanding tax liabilities as certified by the BIR, updating payment of any regulatory fees, license fees, performance bonds or penalties owed to PAGCOR, and remittance of all regulatory fees.
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