Tax collections from online gaming operators and their service providers rose to P6.42 billion last year, the Department of Finance (DoF) reported on Sunday.
In a statement, the Finance department said the amount was 169.74-percent higher than the collection of P2.38 billion from the Philippine offshore gaming operators (POGO) industry in the previous year.
Broken down, the Bureau of Internal Revenue (BIR) collected P5.13 billion in withholding taxes, P644.07 million in income taxes, P91.13 million in value-added taxes and percentage taxes, P81.11 million in documentary stamp taxes, and P469.13 million in other taxes from POGOs, it added.
“This increased tax take was the result of a sustained campaign spearheaded by Finance Secretary Carlos Dominguez 3rd to crack down on errant POGOs and their service providers that have eschewed tax payments, including the income taxes that the government should be collecting from foreign nationals working for these firms,” the DoF underscored.
It also said the bureau issued a total of 170 notices last year to collect P27.35 billion in tax liabilities from errant POGOs.
The BIR has a collection target of P2 billion a month from withholding taxes of POGO workers. With this amount, taxes to be collected from the industry would hit P24 billion a year — a revenue source that was non-existent four or five years ago, before President Rodrigo Duterte handed over control of POGO companies to the Philippine Amusement and Gaming Corp.
To date, the tax agency has shuttered the operations of at least four companies operating as POGO service providers, but have either failed to register their operations as such, allowing them to evade paying the correct taxes to the government, or are registered but not paying the correct amount of taxes.
Dominguez also assured there will be no letup in the ongoing crackdown as the BIR further steps up its campaign against errant POGOs in 2020.
“Basically, we’re going hard against people who are evading taxes,” he added.
To further firm up the government’s campaign against delinquent POGOs, the Finance chief said he is supporting in principle a plan by Albay Rep. Joey Salceda to impose additional taxes on the online gaming industry.
These taxes include a 5-percent franchise tax, and a 15-percent tax on the salary of any individual who is a permanent resident of a foreign country and employed by a licensed offshore gaming enterprise.
On Dominguez’s instructions, the BIR is also working with the Department of Labor and Employment in developing an interagency database of foreigners working in the country to effectively monitor them and ensure that they pay the correct amount of taxes to the government.
MAYVELIN U. CARABALLO