POGO workers to pay P2-billion withholding taxes monthly

MANILA, Philippines — The government has hit a jackpot of sorts after offshore gaming operators agreed on the amount of tax to be slapped on the industry following a meeting with Finance Secretary Carlos Dominguez.

As a result, the government would now be able to collect P2 billion a month in withholding taxes or a whopping P24 billion a year starting this month from the mostly Chinese workers who have been coming to the country in droves to work in Philippine offshore gaming operators or Pogos.

At present, there are roughly 130,000 Chinese Pogo workers working for around 50 licensed gaming firms that are currently operating in the country.

Dominguez confirmed the meeting as he stressed that Pogos need to comply with the provisions of the country’s tax laws.

Pogo operators also need to comply with the regulations on membership dues to the Social Security System and Pag-IBIG Fund, he said.

The Bureau of Internal Revenue, the finance chief said, is starting to collect the withholding taxes from the workers and this is expected to boost state coffers.

At P2 billion a month, the amount of taxes to be collected from Pogos will help boost state coffers, an amount non-existent before 2016 when the Pogo landscape was not what it is now. 

According to industry estimates, the average monthly salaries of Pogo workers – which would be the basis of the taxes they will pay – amount to P40,000 to P50,000.

Pogos are offshore gaming firms that facilitate online gaming via the internet. They use networks and software exclusively for authorized players outside the Philippines – mostly in China but possibly in other countries as well.

Aside from agreeing on the taxation scheme, offshore gaming operators also committed to help government weed out illegal online companies in the country.

According to an industry player, there are are roughly 30 illegal Pogo operators in the country. 

Legalizing them can boost government’s tax collections further. 

Efforts are also underway to also help address cultural tensions that seem to be stemming from the influx of Chinese workers in the country.

At least one Pogo operator is transforming a sprawling 12-hectare former resort in Cavite into a self-contained Pogo island with live, work, play concept.

The island is expected to accommodate over 20,000 workers with full operations in five years. 

Construction of the island is in full swing with half of the 2,500 construction workers hired from the local community.