BIR sees P20 billion tax take from e-games

MANILA, Philippines —  The Bureau of Internal Revenue (BIR) is expected to rake in as much as P20 billion from franchise tax collection as electronic games (e-games) continue to grow.

During yesterday’s Senate committee on ways and means hearing, the Department of Finance (DOF) and the Philippine Amusement and Gaming Corp. (PAGCOR) agreed that there is an upward trend in the e-games sector.

Finance Assistant Secretary Karlo Adriano said estimates showed that the BIR could collect P15 billion to P20 billion from the five percent franchise tax on PAGCOR e-games licensees.

This is a 13 to 50 percent increase from last year’s collection of P13.3 billion. From January to July, franchise tax collection from e-games amounted to P10.7 billion.

Income from any gaming operation, including e-games, is subject to a five-percent franchise tax, payable directly to the BIR.

The franchise tax is also different from other license and regulatory fees paid to PAGCOR.

The higher tax take from e-games stems from the rising trend of the sector as technology continues to evolve in the local gambling industry.

PAGCOR chairman Alejandro Tengo said that e-games is a sunrise industry and could be the future of gaming, especially as most jurisdictions globally are legalizing online gaming.

Tengco said most big land-based casino operators in the United States and Canada have online gaming operations.

“E-games affect land-based casinos, and that’s why integrated resorts (IRs) are also going along,” Tengco said.

Despite the rising potential of e-games, the PAGCOR chief noted that traditional casinos are here to stay.

“IRs here and abroad will not be gone because people would want to go for the personal experience. IRs are also going online to protect their customer base,” Tengco said.

For 2024, PAGCOR expects e-games to account for 35 percent of its total revenues, breaching the P100-billion level for the first time.

Senate committee on ways and means chair  Sen. Sherwin Gatchalian said e-games could more than make up for the lost revenues from the closure of Philippine offshore gaming operators (POGOs).

PAGCOR also bucked the proposal for an anti-online gambling act proposed by Senators Alan Peter Cayetano and  Joel Villanueva.

“If we don’t regulate them, they will just continue to operate. Might as well regulate it properly and generate revenue for PAGCOR, which we also give back to the country,” Tengco said.

PAGCOR’s E-Games Licensing Department now looks after traditional bingo games, e-bingo, e-casino, sports betting, online poker games and specialty games.

As of mid-August, 45 licensed gaming system service providers offer e-games. Among the most common ones are Bingo Plus, Solaire Online, OKBet, InstaWin, Sports Plus, Okada Online Casino, Arena Plus, Gamezone and Bet88.

Data from PAGCOR also showed that 22 more have yet to commence commercial operations.