POGO's exodus to heavily impact Philippines economic recovery

"Pogos are closing down, because they are afraid of COVID-19”

The Bureau of Internal Revenue has revealed that COVID-19 caused exodus, has resulted in reduced tax revenues from Philippine Offshore Gambling Operators (POGOs).

BIR Deputy Commissioner Arnel Guballa has admitted that recent tax collections from POGOs have reduced from pre-Covid levels. “The issue is still the same, Pogos are closing down, because they are afraid of COVID-19,” said Guballa. A lack of workforce is a contributing factor to operators shutting down. 

POGO no-go! Unpaid taxes prohibits all POGO's from resuming operationsGuballa stated: “Plenty of Chinese workers’ visas were canceled and they went back to China because there are plenty of COVID-19-positive cases in the Philippines.” Also, many expats from Thailand, Indonesia and Vietnam went back to their home-countries. 

Previously there has been confusion over what fees and taxes a POGO must pay exactly and the return of the POGO industry has been worrying since May, when COVID lockdown measures were eased and operators were given the greenlight to reopen. 

The recently passed Bayanihan to Recover as One law, which imposes a 5% turnover tax on POGOs surely does not help the situation and as employment conditions are already very tough this extra tax might cause the industry to carry on with its shift towards Taiwan or Malaysia. 

The Department of Finance has made clear that they will look at the books of every online gambling operation that exits the country and Finance Secretary Carlos Dominguez added: “Before a Philippine-registered entity can close its business, it is required to get a clearance from the BIR (Bureau of Internal Revenue). This triggers an audit where the BIR can determine if they have paid the correct taxes.” 

POGOs covered an estimated 11 % of total leasable office space in Metro Manila, or about 1.34 million square meters and if many of them leave, the housing market will also be badly affected, especially in Makati. 

Property advisor Joey Bondoc told the Philippine Daily Inquirer: “POGOs create significant demand for condominiums, which will also have to consider lowering their asking prices should POGOs continue to leave.” 

Magnus Karlsson from iGaming Asia commented: “The golden goose is finally dead. It took some time but they finally found a way to kill of what is left of a once thriving industry. And by enforcing this new law they will suffer even more. 10s of thousands of people will loose their jobs, a lot of them Filipinos.

The 150m USD expected increase in taxes will turn out to be a pipedream. In fact, the 150m they are already collecting will instead dwindle down to nothing in a year or so. A lot of decent paid jobs in industries relying on igaming will suffer.  

SiGMA Agenda:

La Cumbre Digital de las Américas del Grupo SiGMAse celebrará del 22 al 24 de septiembre, y reunirá a caras conocidas del sector de los juegos y la tecnología de América Latina en una serie de paneles de debate en profundidad, con contenidos ofrecidos en español, portugués e inglés.

La 7ª edición de SiGMA Europetrasladará su evento de noviembre al 16 de febrero al 18 de 2021.

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