PAGCOR supports phased POGO taxation

The Philippine Amusement and Gaming Corp. (PAGCOR) supports the proposed phased implementation of the recently proposed tax scheme for so-called Philippine offshore gaming operators (POGO), its top executive said on Tuesday.

PAGCOR chairman and CEO Andrea Domingo particularly agreed the POGO industry is at the infant stage yet and should be taxed not at once but gradually.

“Yes. I would recommend that and I can only pray they will listen,” Domingo said.

“I think the bill will be up for debate and discussion at the plenary soon enough. The legal minds and the constitutionalists in Congress will surely debate on this matter. Then we will see how they will resolve the issues,” she added.

Also, the PAGCOR chief said while the POGO must be taxed, such should be executed in a fair and just manner.

“Fair and reasonable taxation is good. Over taxation will, of course, kill the legal and legitimate business operations. For illegal operations, it will not matter,” Domingo said.

“PAGCOR’s charter does give it jurisdiction over legal gambling so the task of fighting illegal gambling falls on the law enforcement agencies,” she added.

Malacañang issued a statement saying: While the matter is being studied at length by the DOF, what is clear is that the State cannot be denied its right to collect on all applicable taxes on any entity or individual. This is particularly true with regard to the case of individuals working in these companies for certainly, their compensation, salaries or wages for the services they render here are considered taxable income under Section 23 (A) & (D) of the NIRC.

Previously, the House of Representatives’ tax-writing panel approved a 5-percent franchise tax for POGO and a 25 percent income tax of its employees, most of whom are Chinese.

Based on latest projections, such a tax should generate additional revenues for the government coffers of between P20 billion to P45 billion.

Earlier, various lawmakers and the economic managers rejected the Office of Solicitor General’s (OSG) opinion on the taxability of POGO in the country, saying they may not be taxed on the basis that much of their income is generated outside the country.

Finance Secretary Carlos Dominguez III pointed out the Bureau of Internal Revenue is of the opinion that “the situs of income is where the services are rendered.”

“Thus, since POGO are providing services to their counterparts in the Philippines, they are subject to income tax,” Dominguez asserted.

Senate Minority Leader Franklin Drilon shared the same view and said the OSG’s take on the matter was “erroneous, misplaced and misguided.”