POGOs to be subject to taxes
The Finance Secretary from the Philippines said that Philippine Offshore Gaming Operators (POGOs) are subject to taxes.
Philippines.- The Department of Finance of the Philippines said this week that the Philippine Offshore Gaming Operators (POGOs) can be subject to taxes by the local government. He countered the opinion by the Office of the Solicitor General (OSG), which had said the opposite thing.
Finance Secretary Carlos Dominguez III said that POGOs pay corporate income taxes and their workers’ personal income taxes, the Philippine Daily Inquirer reported. He made these comments the same day that the OSG said that POGOs can’t be taxed. Dominguez III said that it’s not OSG’s role to say how the tax laws are applied, as it is a jurisdiction of the Bureau of Internal Revenue (BIR).
“The BIR issued an opinion to this effect months ago saying that the situs of income is where the services are rendered. Thus, since POGOs are providing services to their counterparts in the Philippines, they are subject to income tax,” Dominguez III said. “The same is true for value-added tax (VAT), which also is imposed on services rendered in the Philippines,” he added.
POGOs owe millions in taxes
Around 130 letters have been recently issued by the Department of Finance of the Philippines. They urged POGOs to pay the taxes they owe. The Bureau of Internal Revenue also warned them that if they don’t pay those taxes, they will face sanctions.
The Department of Finance said that from January to August, it collected €24.5 million. The figure represents a 242% rise from the same period in 2018. However, POGOs that haven’t paid their taxes owe around €400 million.
Caesar Dulay, the commissioner of the Bureau of Internal Revenue, told the Manila Times that the companies may face closure. He said that they should prepare to face millionaire losses.
“Tell them to cooperate and volunteer to pay. The problem is they don’t respond to our demand letters,” Dulay said. He also said that there are POGOs that are still non-compliant with tax regulations. This is despite the government’s attempt to regularise the system.
