The House Committee on Ways And Means seeks to end the current practice of the Philippine Amusement and Gaming Corporation (Pagcor) of keeping collections from  the gross gaming receipts of the Philippine off-shore Gaming Operators (POGO) and remit only a portion of their collection to the national government.

The panel approved a bill that will compel the Pagcor to remit 5% of gross gaming receipts of POGO’s to the Bureau of Internal Revenue (BIR).

Ngayon kasi it’s Pagcor collects 2% from them and Pagcor, they collect 8 billion from the 2%. So essentially, with this measure, Pagcor will collect P20 billion and we are asking them essentially, since the 5% is the franchise tax they remit everything to BIR. So to P400 million, the National Government stands [to] gain P20 billion per year,” House Ways and Means committee chairperson Joey Salceda said. 

The committee maintained that POGO’s should be taxed in the Philippines even if their operations are online since they have workers in the country.

The current practice stems from a legal opinion of the Office of the Solicitor General (OSG), which the proposed law seeks to correct.

The bill will be endorsed to the full House for its consideration.

“Income is derived here and there is a basic accounting principle which says that you can only recognize cost if there are revenues. So all these workers here are costs with respect to the POGO operations” Salceda said.

The Department of Finance (DoF) maintained that the Bureau of Internal Revenue (BIR) already held that the POGOs can be taxed in the Philippines because they make money from services rendered in the country.

Senate Minority Leader Franklin Drilon took up the cudgels for the DOF and also assailed the OSG’s legal opinion.

Sa akin po, nagkamali si SolGen [Jose] Calida dun sa kaniyang statement na hindi taxable ang POGO. Sa katunayan, ang BIR ang dapat mag-interpret ng ating batas tungkol sa buwis, hindi po yung OSG. Yan po ang nakalagay sa section 4 ng NIRC (National Internal Revenue Code)….I am told that the BIR does not agree with this, the DOF does not agree with this, and even the Executive Secretary does not agree with this, “ Drilon said. 

PAGCOR for its part insisted that they were constrained to abide by the OSG since the law was not clear but will abide by any measure Congress will pass regarding the tax accountabilities of POGOs.

Still the agency is wary that the imposition of the tax will chase POGOs away from the country. Last week, the House minority bloc called for the scrapping of POGOs unless the government can tax them. (Jasper Camilo)