Tuesday, June 22, 2021
Home Latest News Senate Approves POGO Bill, Eyes Higher Tax Revenues

Senate Approves POGO Bill, Eyes Higher Tax Revenues

Although the bill hopes to generate multi-billion pesos worth of government revenues, some senators are concerned about its social costs.

Before the Senate of the Philippines went on a break, the plenary has approved one of its landmark bills: Senate Bill No. 2232 or An Act Taxing Philippine Offshore Gaming Operations (POGO), or the POGO bill.

This bill, sponsored by Senator Pia Cayetano and co-authored by Senators Ralph Recto and Imee Marcos, seeks to amend the National Internal Revenue Code (NIRC) to collect higher taxes from POGOs.

Three senators— Risa Hontiveros, Frank Drilon, and Francis Pangilinan— opposed the bill.

Better Taxation

The bill was approved on second reading on Wednesday following a lengthy period of amendments. It was certified as urgent by President Rodrigo Duterte. (Read: Confused On What Is The SOGIE Bill And Why Is It Important? Let These Shows Educate You)

Under the bill, all offshore gaming licensees, whether Philippine or foreign-based, will be considered doing business in the Philippines and will have to pay a 5% gaming tax on the gross gaming revenue or receipts derived from their gaming operations.

senate-approves-pogo-bill-bats-for-better-tax-revenues
A House panel approves a bill setting a uniform 5 percent rate on the profits of online gaming firms, which a lawmaker expects to raise ₱45 billion yearly. (Photo from CNN Philippines)

Moreover, foreigners employed by offshore gaming licensees and service providers will be subjected to a 25% withholding tax. The measure provides a minimum final withholding tax due of P12,500 for any taxable month. (Read: Prank No More: House Bill to Penalize Cancelled Food Delivery Orders)

Currently, the franchise taxes of POGOs are computed based on 5% of their net income. With the new taxes, the government is expecting to generate multi-billion pesos worth of government revenues in 2021 and 2022, P28.7 billion and P32 billion respectively. 

60% Allocation for Universal Healthcare Act

During the period of amendments, Senator Cayetano introduced a provision that will allocate 60% of the total revenue collected from POGOs for the implementation of the Universal Healthcare Act. (Read: House Bill to Require Restaurants, Stores, Schools to Donate Excess Food to Charity)

Meanwhile, 20% will be for the enhancement of the Department of Health’s facilities and 20% will be used for the attainment of the Sustainable Development Goals as determined by the National Economic and Development Authority. 

senate-approves-pogo-bill-bats-for-better-tax-revenues
A POGO (Philippine Offshore Gaming Operator) office in Tambo, Parañaque City, is closed temporarily during the coronavirus lockdown. (Photo from BusinessMirror)

Serious Social Cost

However, Senator Pangilinan, one of the three senators who opposed the bill, said that allowing POGOs in the country comes with a serious social cost.

“Indeed, whatever amount the BIR may collect from POGOs may be used to fund projects to give relief to our people suffering during this pandemic. However, we cannot and should not turn a blind eye to the social costs that the POGI industry brings in and has brought upon us, social costs that may be difficult to revers,” he said.

Controversies have arisen surrounding the POGO industry, but the Philippine Amusement and Gaming Corporation (PAGCOR) has fiercely fought for the resumption of its operations amid the COVID-19 pandemic. (Read: John Lloyd, Maria Ressa Star in Video Protest Against Anti-Terror Law)

The House has already approved its version of the POGO tax measure in February 2021. 

 

Most Recent

FOLLOW US!