The government will tax turnover instead of revenue, and expects to take about US$361 million a year.
Philippines.- President Rodrigo Duterte has signed into law the Philippines’ economic recovery package known as Bayanihan 2 (or Bayanihan to Recover as One Act), which makes changes to the way taxes are applied to Philippine offshore gaming operators (POGOs).
The law applies a “five percent (5%) franchise tax on the gross bets or turnovers or the agreed pre-determined minimum monthly revenues from gaming operations, whichever is higher, earned by offshore gaming licensees, including gaming operators, gaming agents, service providers and gaming support providers.”
The government has said it expects to obtain about Php17.5 billion (US$361 million) a year from POGOs.
Senate minority leader Franklin M. Drilon told the Manila Bulletin: “Bayanihan 2 will more than double the tax collection from POGOs, from P7 billion estimated collection in 2019 to approximately P17.5 billion this year because of the reforms we have introduced in the measure.”
The new law also changes the currency in which tax is calculated. Taxes will now be computed based on the equivalent in Philippine pesos of the foreign currency used according to the prevailing official exchange rate at the time of payment. This aims to close a loophole used by operators to under declare income.
The Bureau of Internal Revenue (BIR) will have the power to shut down any POGO operations which do not comply with the new law.