POGO tax collection increases

MANILA, Philippines — Taxes collected from Philippine offshore gaming operators (POGOs) more than doubled to almost P9 billion last year, but such tax take is still far from what is expected from the industry.

Data from the Department of Finance showed that the Bureau of Internal Revenue (BIR) managed to collect P8.88 billion in taxes from POGOs in 2022.

This is more than double the P3.91 billion in tax earnings collected by the government the prior year.

Despite the significant jump, this remains a far cry or just almost 30 percent of the P32 billion in taxes projected from the POGO Law passed by the Duterte administration in 2021.

Last year, POGOs were put in the limelight as the government, as well as several lawmakers, continue to push for the industry’s shutdown following increasing incidence of crime.

Data showed that almost 50 percent of the taxes collected last year were from withholding taxes at P4.35 billion. Foreign workers in POGOs are mandated to file a withholding tax of 25 percent of their gross salary.

Another P3.65 billion was collected from gaming tax. Under the law, POGOs are mandated to pay a gaming tax of five percent of their gross income.

State-run Philippine Amusement and Gaming Corp. (PAGCOR) also slaps regulatory fees of up to two percent on their licensees.

Other contributions from POGOs last year include P806 million in income tax, P43.2 million in business taxes covering value-added tax and percentage tax, P19.42 million in documentary tax stamps, and P9 million in other taxes.

No less than DOF Secretary Benjamin Diokno recommended the closure of POGOs given the industry’s social and economic impacts.

The DOF has been lobbying for the closure of POGOs as it argued that the social costs of the industry outweigh the revenues the government is getting from the sector.

As of now, there continues to be a steady decline in the number of registered POGOs, dropping to just 32 active offshore gaming licenses from the pre-pandemic peak of 281.

PAGCOR, for its part, said it will utilize more stringent monitoring measures and implement new fees to strengthen their capabilities in combating illegal POGO operators.