“Classification does not exempt tax. There must be express provision of law granting tax exemptions.”
The Philippine Offshore Gaming Operators or POGOs do not qualify for any tax incentives, according to the Philippines agencies on finance, taxation and gaming regulation, despite being classified as a business process outsourcing or BPO companies.
According to the officials of the Department of Finance, Bureau of Internal Revenue or BIR and the regulator Philippine Amusement and Gaming Corporation or PAGCOR, service providers under POGO are not tax exempt and disproved the claims that they enjoy tax perks.
Finance Secretary Carlos Dominguez III stated that POGOs cannot use the BPO status as an excuse not to pay the proper taxes. Merely classifying them as BPOs does not exempt them from taxes and that there must be a provision in the law that would grant them such incentives: “Classification does not exempt tax. There must be express provision of law granting tax exemptions.”
BIR Deputy Commissioner Arnel Guballa added that incentives are given by the Congress and are not in any way connected to the industry classification.
PAGCOR Vice President for Offshore Gaming and Licensing Department clarified that POGO companies are considered as gambling entities and are subject to franchise value-added and corporate income taxes. Employees for POGOs are likewise subject to withholding taxes.
The PAGCOR official stated that what is referred to as the BPOs are the service providers such as customer support, tech support, software support and live streaming.
POGOs are required to remit monthly gaming fees, as well renewal and accreditation fees to PAGCOR on top of the franchise tax remitted to BIR.
The Accredited Service Providers Association of PAGCOR stated that they remain steadfast in paying their taxes and they have done in the past, even before the suspension of operations was ordered.
They have reiterated that they pay and update their taxes and will continue to do so.
Online casino companies in the country have been given a go signal to start operations upon compliance to a strict set of guidelines sent out to all POGO companies by regulator PAGCOR.
The guidelines include, but not limited to, ensuring that only 30 percent of the workforce is allowed to report to work, with high priority for local workers, regular Covid-19 testing for skeletal workforce, updating tax liabilities, regular inspection and sanitation of work area and shuttle services, and strict social distancing practice.
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