BIR to padlock errant POGO, ASAP

Finance Secretary Carlos Dominguez III ordered the Bureau of Internal Revenue (BIR) to shut down recalcitrant offshore gaming operators or POGO who refuse to withhold and remit the appropriate tax from their employees.

“Close down organizations that don’t withhold and remit the proper amount taxes from their employees. This will be done together with Departments of Labor and Employment, of Justice, Bureau of Immigration, Office of the President and Philippine Amusement and Gaming Corp. (PAGCOR),” Dominguez told finance reporters in a Viber message.

He said the mandate is for the BIR to execute the order “as soon as possible.”

In meeting agency heads under the Department of Finance (DoF) umbrella, Dominguez noted the slow pace of collection despite the issuance of some 130 letter-notices to errant POGO firms.

According to the DoF, the tax liability of the various POGO amount to P21.62 billion.

He told revenue officials their immediate closure will force the industry to respond to the tax assessment: “Those who don’t pay or respond to your assessments, clamp them down.”

He specifically prohibited the BIR to reject any “lump sum” offer or any other arrangement from POGO to ensure the proper payment of their tax liabilities.

“The collection should be per individual. You force the issue and bring them to the court. I mean, close them down,” Dominguez said.

BIR Deputy Commissioner Arnel Guballa told Dominguez in executive meeting that POGO service providers remitted only P175 million in withholding taxes in 2017 followed by P579 million in 2018.

“From January to August 2019, the BIR collected P1.4 billion from POGO, representing a 242 percent increase from the previous year’s collection,” Guballa said.

Dominguez knew he could collect as much as P2 billion a month in personal income tax from POGO employees, the majority of whom are Chinese.

PAGCOR Chairman and CEO Andrea Domingo is optimistic the regulator could collect P8 billion from the POGO this year as targeted.