(Eagle News) – President Rodrigo Duterte signed into law on Wednesday, Sept 22, an act taxing Philippine Gaming Offshore Operations (POGOs).
Malacanang announced this today, Thursday, Sept. 23, saying this was part of the Philippine government’s regulation of all kinds of gambling.
Presidential Spokesperson Harry Roque said Republic Act 11590, which taxes POGOs, allocates 60 percent of total revenue collected from gaming tax imposed on offshore gambling to be be allocated for the implementation of Universal Health Care Act.
Another 20 percent shall be allocated for the “health facilities enhancement program,” and another 20 percent is “for the attainment of sustainable development goals.”
The government hopes to collect P32 billion in 2022 with the signing of RA 11590.
President Duterte earlier said that he is looking at taxing gambling operations in the country since he needed the money to be sourced from these revenue collections to fund the government’s COVID-19 response.
“Ngayon po wala tayong pera. Kung saan man tayo makakuha ng pera, kukunin ko. Kung diyan sa gambling, so be it,” he said in a “Talk to the People” late August this year.
According to a copy of RA 11590, alien individuals employed by offshore gaming licensees and service providers will have to pay a final withholding tax of 25 percent on their gross income.
All POGO employees will also have to pay a minimum final withholding tax due of PHP12,500 for any taxable month.
“All offshore gaming licensees and service providers shall submit to the Bureau of Internal Revenue the original copy of notarized contract of employment clearly stating therein the annual salary and other benefits and entitlements of the concerned alien,” the law read.
All foreign POGO employees are also required to have a tax identification number (TIN).
In fact, offshore gaming licensees and providers who will employ a foreign national are required to ensure that their foreign employees have a tax identification number. Otherwise, they will pay a fine of PHP20,000 for every foreign national who does not have a TIN, and their primary license and other licenses which they acquired from the government could also be revoked.
Other so-called non-gaming revenues of Philippine-based offshore gaming licensees will also be subject to an income tax equivalent to 25 percent of the taxable income derived during each taxable year from all sourced within and without the Philippines.
Any Freeport authority or any special economic zone authority, including the Philippine Amusement Gaming Corporation (PAGCOR) and any tourism zone authority, could also impose regulatory fees on offshore gaming licensees. This, however, should cumulatively exceed two percent of the gross gaming revenue or receipts.
The entire gross gaming receipts from gaming, “whichever is higher, will be levied, assessed, and collected a gaming tax equivalent to 5 percent, in lieu of all other direct and indirect internal revenue taxes and local taxes, with respect to gaming income.”
Meanwhile, accredited service providers to offshore gaming licensees will not be subject to the gaming tax, but will pay such rate of tax and will be subject to all other applicable local and national taxes.
(Eagle News Service)