Senator Pia Cayetano explained that under her proposal, the taxation of gaming-related and non-gaming-related activities of POGOs and service providers will be clarified, which will be covered by the 25% withholding tax.
Sen. Ralph Recto said he has no recollection of presumptive income taxation in the country but based on data from PAGCOR, POGOs had 118,000 foreign employees in the country in 2019.
Based on that number, the country should have collected almost P40 billion in taxes from POGO workers back then.
“Two percent gaming regulatory fees P5.7 billion, 5% franchise tax would have been P14.3 Billion, compensation income tax would have been P7.7 Billion under this bill, ergo roughly P38.8 Billion,” said Recto.
He said the collection should be even higher here based on DOLE data that POGO has 183,000 foreign employees in the country.
According to Recto, according to a study by Price Water House Coopers, the country’s gross gaming revenue should reach P540 billion or double the P287 billion stated by PAGCOR.
Cayetano’s bill to clarify tax issues of POGOs
Sen. Joel Villanueva said that based on records, in 2019, 47% of the violations committed by POGO licensees were related to third-party audits due to failure to cooperate with PAGCOR accredited institutions.
“It is important to note that our very own Commission on Audit (COA) last year found deficiencies in the processes of this third party na hinire ng PAGCOR, which is Global Comrci( the third party of PAGCOR ) in determining the GGR (Gross Gaming Revenue)” said Villanueva.
Based on PAGCOR data, there are only 38 POGOs in the country, but according to the BIR, it reaches 43. PAGCOR and BIR data only match the 24 local gaming agents currently in the country.
According to Cayetano, the five POGOs registered with the BIR may not yet be on PAGCOR’s list.
There are 136 service providers of POGOs, based on data from PAGCOR, while 232 are registered with the BIR.
Cayetano wants the BIR and PAGCOR to be part of the proposed law so that the BIR and PAGCOR can have clear information sharing to match their data.