MILITANT group Bagong Alyansang Makabayan (Bayan) leader Renato Reyes Jr. on Tuesday claimed that the government practically lost P1.914 billion and $7.629 million (P335 million) in revenues from casino operations due to “questionable perks” given by the Philippine Amusement Gaming Corp. (Pagcor) to gambling operators, some of whom have close ties with President Benigno Aquino 3rd.
Citing a report by the Commission on Audit (COA), Reyes said that Pagcor “gave some questionable perks to the big gaming firms in the Pagcor Entertainment City.”
“Pagcor took a huge revenue cut so that it could pay for the corporate income taxes of some of the richest casino operators in the country. You read that right. Government just paid for the corporate income taxes of Solaire, City of Dreams and other licensees in the Entertainment City,” said the Bayan leader.
Malacanang distanced itself from the issue, stressing that Pagcor will have to clarify matters involved in the COA findings.
“Based on our rules, whenever there are audit observations or audit finding such as this, it is the duty of the agency or department to give a comprehensive explanation and that it studied by COA to find out if no laws are violated,” Presidential Communications Secretary Herminio Coloma Jr. explained.
“It is best that we wait for the explanation by Pagcor and further evaluation by COA,” he stressed.
Reyes said the findings on Pagcor revenues appear in the latest COA Report for 2014. Pagcor is run by President Aquino’s classmate, Cristino “Bong” Naguiat.
“Last year, Pagcor reduced the license fees of several Pagcor Entertainment City casinos by 10 percent, a move that stemmed from new tax policies laid down by the Bureau of Internal Revenue. Under the new policy, Pagcor licensees were no longer exempt from paying corporate income tax. The four licensees in the Entertainment City of course complained, arguing that their provisional licenses made them tax exempt,” the Bayan leader said.
Reyes said Pagcor agreed to reduce license fee payments of the casinos and allocate these to paying the corporate income taxes of the casinos.
“Government paid for the taxes of these billionaires,” Reyes noted, alluding to Travelers International Hotel Group affiliated with Andrew Tan, Bloomberry Resorts and Hotel which operates Solaire and is affiliated with Enrique Razon, Tiger Resorts Leisure and Entertainment of Kazuo Okada and partner Tonyboy Cojuangco, and the MCE Leisure Corporation affiliated with the SM group of Henry Sy which operates City of Dreams.
Tan, who is also a real estate mogul, was among Aquino’s campaign contributors in the 2010 elections.
“Tan and Razon are also part of that elite group of Filipino billionaires. Okada meanwhile is a well known Japanese gaming casino and slot machine mogul and ranks number 28 in Forbes list of Japan’s richest,” Reyes said.
According to the COA report, “Pagcor could have earned a total of P1.914 billion and US$7.629 million during CY 2014 and the Government could have collected franchise tax in the same amount had it not reduced by 10% the license fees being collected from certain licensees.”
“In view of the foregone opportunity to raise revenues, we recommend that the (Pagcor)
Management revisit or reconsider its decision in reducing license fees that is inconsistent with its mandate of raising funds for the government’s socio-civic and national development efforts,” it said.
Reyes lamented that while working people have been demanding tax relief and a restructuring of the income tax system, the government generously paid for the corporate income taxes of big casinos.