Philippines Government Implement New Tax on Offshore Gaming Providers

 The chairman of the House Ways and Means Committee in the Philippines on Thursday said establishing a tax regime for Philippine Offshore Gaming Operators (POGOs) would help stabilize the industry, which was "wracked by the uncertainty" due to the Supreme Court’s (SC) temporary restraining order (TRO) on their tax treatment.

Albay Rep. Joey Salceda made the statement as he lauded President Rodrigo Duterte for signing Republic Act No. 11590, which imposes a 5 percent tax on gross gaming revenues (GGR) of offshore gaming licensees and a 25 percent withholding tax on foreigners employed by POGOs.

“President Duterte was very clear: He will only allow gaming if they pay the right taxes. This will make sure they do,” Salceda said.

He said the measure will help the POGO industry recover since the country lost some of them to Cambodia due to the “uncertain” tax regime in the past.

“As long as they pay the right taxes and comply with all our laws, they will be able to operate,” Salceda said, highlighting that the POGOs would be operating under stricter terms.

He said after the SC TRO and the Covid-19 pandemic, the POGO industry shrunk by as much as 50 percent.

Salceda said he expects the sector to begin recovering with the passage of a clearer tax regime, as well as the property sector since POGOs are a key part of office occupancy in Metro Manila.

He said the law will generate PHP15.73 billion (£230m/$310m/€270m) in total public resources in its first full year and PHP144.54 billion over the next five years.

“The most important sentence here is that POGOs are considered ‘doing business in the Philippines’. They cannot escape our jurisdiction or the reach of our tax authorities. It is the single most consequential sentence in that law,” Salceda said.

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