The Philippines wants to generate tax revenue from the gaming industry, calling for 25% income tax on foreign employees and 5% tax on offshore gaming operators’ gross gaming revenue.
Offshore Gaming Operators to Pay 5% Tax in the Philippines
Philippine President Rodrigo Duterte has called lawmakers to move forward and pass the bill, which would set income and gaming taxes on offshore online casinos.
In a statement on Monday, the presidential spokesman Harry Roque said that they hope that this measure will give the government a stricter oversight on the industry and also generate revenue, which the country needs.
Duerte designated SB2232 as “urgent.” According to Sen. Pia Cayetano, the bill’s sponsor, offshore gaming operators must pay 5% tax on their gross gaming revenue. Online casino employees who are not from the Philippines and their service providers must also pay 25% income tax.
Cayetano Urges for Offshore Gaming Licenses
Last Tuesday, during her sponsorship for the bill speech, Cayetano said that the changes could lead to more revenue, which will exceed the amount collected by the Bureau of Internal Revenue (BIR) from POGOs in 2020.
Cayetano said that this industry could have been a much better source of revenue. She attributed the missed opportunities to the lack of tax provisions and offshore gaming licenses for operators, agents, and service providers. She also stated that the bill could prevent future issues, which could arise for the government to collect taxes.
Currently, the Philippines is looking for new revenue sources to tail off its debt. At the end of March 2021, the country’s total outstanding debt rose to approximately $512.87 billion (P10.77 trillion). The government borrowed money for the pandemic and other requirements. The debt includes 72% domestic borrowings, and 28% of it sourced externally.
China Demanded the Philippines to Shut Down POGO Years Ago
For years, the Philippines has struggled to find a solution to regulate the POGO industry, with foreign operators and employees located outside the country. At one point, the issues became the basis for diplomatic disputes between Manila and Beijing when the Chinese authorities demanded, from the Philippines, to shut down their POGO industry, fearing Chinese labor exploitation.
At the end of 2019, ACT-CIS Party Niña Taduran filed a House Resolution to check the mismatch between the expected tax remittances from the casino sector and the actual figures POGOs reported.