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POGOs could be suspended over failure to file tax returns

Projected revenues for 2021 are down 68.63 per cent.
Projected revenues for 2021 are down 68.63 per cent.

The suggestion was made by the Bureau of Internal Revenue (BIR).

The Philippines.- BIR Deputy Commissioner Arnel Guballa has suggested that Philippine Offshore Gaming Operators (POGOs) that do not file income tax returns or who under-declare their sales should be suspended or temporarily closed.

During a Senate session, Guballa suggested the National Internal Revenue Code (NIRC) should include the failure to file an income tax return and substantial under-declaration of revenues as “additional grounds to suspend and temporarily close the business establishment of any person or taxpayer, not just a VAT-registered person or taxpayer.”

The House of Representatives has approved a 25 per cent income tax on aliens who are employed by offshore gaming licensees and 5 per cent excise tax on the gross revenue or receipts of POGOs.

However, POGOs argue that once their foreign employees acquire working visas, they should be taxed like Filipino citizens or resident alien employees.

In February, The Philippines’ lower chamber passed a bill imposing taxes on online gambling firms in a bid to replenish state revenues after the Covid-19 pandemic.

POGO revenues for 2021 tax year 2021 will be lower than expected

Based on January voluntary payments, BIR Deputy Commissioner Arnel SD. Guballa said the total projection for POGO revenues for 2021 will be P3.92bn.

Pogos taxes for January 2021 decreased by 68.63 per cent compared to the same month last year.

Guballa said: “The real reason for this drop in collection is that during the pandemic… most of the POGOs stopped operating, that is one major factor that’s why there was a drop in collection.”

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