Senate approves proposed bill imposing mandatory tax on POGO

The Senate on Wednesday approved a proposed measure which seeks to impose revenue taxes for Philippine offshore gaming operators (POGO) and its service operators.

Voting 17-3-0, senators passed on third and final reading Senate Bill (SB) 2232, aimed to establish a tax regime covering all Philippine or foreign-based POGOs considered doing business in the Philippines.

Under the measure, the online gaming facilities will be slapped with a five percent tax rate on their gross gaming revenue or receipts derived from their gaming operations.

POGO workers will also be subject to the 25 percent withholding tax rate or a minimum of P12,500 for any taxable month “considering that they are not engaged in trade or business within the Philippines”.

SB 2232 was passed on second and third reading within the same day after President Rodrigo Duterte certified it as urgent on Monday. This gives Congress the power to bypass the three-day reading rule before voting on it on final reading.

Senator Pia Cayetano who sponsored the bill as chairman of the Senate Committee of Ways and Means earlier said it will “plug the loopholes” in the country’s tax code related to POGO operations.

Once enacted into law, the Philippines is targeted to earn around P28.7 billion in tax revenue collection from the gambling operations once enacted into law.

Of the figures, 60 percent will be allocated for the implementation of Republic Act 11223 or the Universal Healthcare Law, 20 percent will be given to Health Facilities Enhancement Programs (HFEP) of the Department of Health while the remaining 20 percent will be allocated for the attainment of the Sustainable Development Goals (SDGs) with the specific SDG target to be determined by the National Economic and Development Authority.

The collected taxes will be directly remitted to the Bureau of Internal Revenue with the Philippine Amusement and Gaming Corporation and Investment Promotion Agencies serving as third-party audit platforms.

Only three senators — Senate Minority Leader Franklin Drilon and Senators Risa Hontiveros and Francis Pangilinan — objected to its approval.

In voting no, Pangilinan explained that he opposed its approval because of the “serious social costs” the hosting of POGO operations had inflicted in the Philippines.

Aside from the sharp increase in rent prompted by the arrival of Chinese employees in the country, the senator said POGO workers were also involved in various criminal activities such as the bribery of immigration officials, prostitution, money laundering, human trafficking, tax evasion, online fraud, kidnapping, and murder.

“We cannot and should not turn a blind eye away from the social costs that the POGO industry brings and has brought upon us. Social costs that may be difficult to reverse,” he said.

“Instead of allowing POGOs to thrive, perhaps we ought to have re-allocated funds from other sources to support our pandemic relief efforts,” he added.

With the Congress adjourning sine die on Friday, the Upper Chamber is targeting to pass other priority measures including the amendments on Public Service Act and the establishment of the Department of Migrant Workers and Overseas Filipinos.

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Credit belongs to : www.tribune.net.ph

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