NEWS: China Pogos with 50Billion unpaid Taxes&130k Unregistered Workers paid taxes ‘under the table’
POGOs’ unpaid taxes hit P50 billion - philstar.com
Over 130,000 Chinese Pogo workers unregistered with BIR, says official - business.inquirer.net
Locsin: Pogos paid taxes ‘under the table’ - newsinfo.inquirer.net
BIR eases tax rules for Pogos to pay, resume operations - business.inquirer.net
POGOs’ unpaid taxes hit P50 billion
‘Collect P50-billion POGO unpaid back taxes’ Photo Source: https://businessmirror.com.ph/2020/06/12/collect-p50-billion-pogo-unpaid-back-taxes/
Of the P54 billion that flowed in and out of the country through Philippine offshore gaming operators (POGOs), only P7 billion was counted as net inflow, the Anti-Money Laundering Council (AMLC) reported yesterday.
Citing the agency’s risk assessment, AMLC chief Mel Georgie Racela said the figures indicated leakages through fraudulent means.
On the other hand, while the state-owned Philippine Amusement and Gaming Corp. (Pagcor) annually collects two percent of the total gross profits from POGOs as fees, the Bureau of Internal Revenue (BIR) said the industry still owes the government P50 billion in the form of franchise, corporate and other taxes.
In view of these, Sen. Joel Villanueva urged the government to suspend the POGOs until regulations are tightened and leakages are plugged.
Villanueva, chairman of the committee on labor and employment, said the POGOs were not only blamed for the rise of criminality in the country, but it reportedly increased the risk of money laundering.
He pushed for the suspension of the POGOs during a joint hearing conducted by the committees on labor and employment, and trade and commerce chaired by Sen. Aquilino Pimentel III.
“Until the regulations of the concerned government agencies have not been harmonized, until they have not seen themselves how to implement these, these POGOs must be suspended,” Villanueva said.
It was revealed during the hearing that while an interagency body has set new rules requiring POGO workers mostly Chinese nationals to obtain work visas before entering the country, there appears to be no coordinated and strict measures to enforce the rule.
“This means that thousands of POGO workers arrived in the country as tourists and get employed. A majority of them did not secure alien employment permits from the Department of Labor and Employment and they only used the limited special work permits issued by the Bureau of Immigration. Worse, they do not have tax identification numbers,” Villanueva said.
The country also faces increasing threats of money laundering activities with the rise of POGOs, officials told the committees.
Senators denounced the differing figures of the BI, DOLE and Pagcor on the actual number of foreign and local POGOs workers, which gave the authorities difficulty in collecting taxes from and running after these illegal aliens.
DOLE figures showed there are over 120,000 POGO workers in the country, while Pagcor counted only 118,239.
Over 130,000 Chinese Pogo workers unregistered with BIR, says official
Senate urged to look into tax liabilities of POGO workers Photo Source: https://businessmirror.com.ph/2019/08/15/senate-urged-to-look-into-tax-liabilities-of-pogo-workers/
The Bureau of Internal Revenue (BIR) is going after the income tax payments of over 130,000 unregistered Chinese working in the Philippine offshore gaming operators (Pogo) sector.
Internal Revenue Deputy Commissioner Arnel Guballa told reporters last Monday the BIR had expanded its investigation to also include about 2,000 foreigners employed in the Clark and Subic economic zones.
“They are consultants, engineers, designers, IT [information technology workers]… Our estimates showed that there are around 2,000 [foreign workers in economic zones] but what we are really prioritizing are the Pogos,” Guballa said.
The BIR official said “majority” of the Pogo workers in the country were Chinese.
He said “all” of these Chinese workers in Pogos did not secure tax identification numbers (TIN) from BIR, and as such were not registered as taxpayers.
“We are looking for all of them. Although they are employed in online gaming, what we are checking is if they are paying their taxes,” Guballa said, as he noted that some Pogo firms actually had remittances to BIR.
“We will check if their remittances are correct, if [payments were] below the actual [income tax] rate or below the declared income. We are counterchecking the income that they receive,” he said.
Before this month ends, BIR will finalize the list of Pogo workers as it is currently in the process of validating data.
For those to be found not paying taxes, “we will file the corresponding necessary enforcement – if you are not registered, then we impose penalties on those unregistered.”
Guballa said many Pogos were already registering because they now know the government was “very much aware” of their activities.
But even after these Pogos finally register, Guballa said BIR “will stretch back as far as we will determine [how long they were operating so they] will pay for all the penalties of all those violations.”
Early this month, the Department of Finance (DOF) said the government wanted to collect about P32 billion in unpaid income taxes from foreigners who work in the Pogo industry.
It was based on a rough computation by Finance Secretary Carlos G. Dominguez III on the assumption that up to 138,001 foreign workers earned an average of $1,500 per month and paid the 25-percent personal income tax.
Based on the report submitted to Dominguez by the Department of Labor and Employment (Dole) and Bureau of Immigration (BI) last month, 54,241 Pogo workers had been issued alien employment permits (AEPs), besides 83,760 who have special working permits (SWPs).
For Dominguez, the reported salaries of foreign Pogo employees amounting only about P20,000 a month were “ridiculously low” for skilled workers.
Locsin: Pogos paid taxes ‘under the table
“The tax-evading Pogos did pay out as you must suspect, but under the table which puzzled them,” Foreign Secretary Teodoro Locsin Jr. tweeted on Thursday, referring to Philippine offshore gaming operators (Pogos), which have threatened to leave the country because of stringent tax measures.
The Pogos reportedly owe the government some P50 billion in taxes. But in his tweet, Locsin said “a collector whose affiliation to any department was kept a mystery would turn up himself” to pick up the money.
He did not identify the collector.
The foreign affair official said China, where gambling is illegal, “will be ecstatic” by the Pogos’ move to exit the Philippines. —Dona Z. Pazzibugan
BIR eases tax rules for Pogos to pay, resume operations
Photo Source: https://twitter.com/i/web/status/1279244518777171969
The Bureau of Internal Revenue (BIR) has eased some of the tax requirements for Philippine offshore gaming operators (Pogos) to resume operations under a less restrictive COVID-19 community quarantine.
Internal Revenue Commissioner Caesar R. Dulay issued a memo, dated May 25 yet but posted on the BIR website only on Friday (July 3), listing down revised guidelines and requirements that both Pogo license holders and service providers needed to comply with before being allowed to operate.
Last May, the BIR issued a different memo with original guidelines and requirements ordered by Deputy Commissioner Arnel S.D. Guballa, who also heads the BIR’s Pogo task force.
Both memos—Revenue Memorandum Circular 46 and 64-2020—had an Annex A of conditions and documentary requirements, which the Inquirer compared.
In Annex A of memo No. 64-2020, the BIR removed specific coverage dates for franchise tax payments, even as the earlier memorandum circular specified the settlement for dues in 2019 and the first quarter of 2020.
On remittance of withholding taxes, both memos specified mandatory payments and documentation for the months of January to April, although the newer memo inserted the phrase “if applicable.”
Also, while memo No. 46 mandated “submission of a notarized undertaking to pay tax arrears for prior years,” the later memo circular removed the phrase “for prior years.”
In the case of Pogo service providers, the earlier memo included among the conditions that Pogos must have had “remitted and paid the withholding taxes due from the months of January to April 2020, including the 25-percent final withholding tax (FWT) due from their foreign employees.”
But in memo No. 64-2020, the provision on foreign workers’ FWT was removed.
The same was true for Pogo service providers’ tax arrears—the phrase “for prior years” present in memo No. 46-2020 was scrapped.
The Inquirer asked Dulay and Guballa if memo No. 64-2020 was meant to make it easier for Pogos to comply with the BIR’s requirements, but they did not reply as of early evening on Friday.