BIR changes tax requirements for Pogos to resume operations

The Bureau of Internal Revenue (BIR) has tweaked the tax rules for Philippine offshore gaming operators (Pogos) and their service providers. The modifications will allow them to continue operating as the country grapples with the coronavirus pandemic.

Pogos and their service providers that are seeking tax clearance will benefit from the changes. A memo from Internal Revenue Commissioner Caesar R. Dulay dated May 25 and was posted on the BIR website on Friday shows the new and requirements for Pogo license holders and service providers.

On the issued Revenue Memorandum Circular (RMC) No. 64-2020, the list of requirements for Pogo licensees includes registration with the BIR, the five percent franchise tax, remitting, and payment of withholding taxes, and filing of a notarized undertaking to pay tax arrears.

Moreover, companies are no longer required to send copies of their 2019 and first quarter 2020 quarterly returns for franchise tax.

Pogo service providers

The BIR still requires Pogo service providers to register with the bureau, file their income tax return (ITR) for 2019, remit and pay withholding for January-April, and file a notarized undertaking to pay tax arrears.

“Failure to comply with any of the above-mentioned conditions as as submission of falsified or fraudulent documents shall result in the denial of the issuance of a BIR Clearance for resumption of operations,” the BIR said.

Also read: Palace to POGOs not paying taxes: ‘Goodbye’

On June 30, Finance Secretary Carlos G. Dominguez III announced that the BIR will still require Pogos to settle their unpaid even if they close.

While officials refused to reveal the amount of back Pogos owed to the BIR, the Department of Finance (DOF) said that as much as P20 billion a year in corporate and personal income taxes could be collected from Pogos.

About 60 Pogos operated with Pagcor licenses in early 2020, while there are 218 service providers with 130,000-150,000 workers, of which at least three-fourths were foreigners.

Pogo firms usually hire service providers whose workers directly transact with their clients, which are online gamblers abroad.