Offshore gaming workers targeted for tax enforcement
THE Department of Finance (DoF) said it will seek to compile a database of foreign workers hired by Philippine offshore gaming operators (POGOs) to help ensure that they pay the correct taxes.
In a statement, Finance Secretary Carlos G. Dominguez III called on government agencies to compare the list of foreign nationals working for POGOs against the data held by regulators who screen, provide work permits and register these gaming operators.
Mr. Dominguez wants the Department of Foreign Affairs, Department of Justice (DoJ), Department of Labor and Employment (DoLE), Philippine Amusements and Gaming Corp. (PAGCOR), Department of Trade and Industry, and the Securities and Exchange Commission to cooperate in compiling the database.
A POGO takes bets and pays winners through an online gaming account. Earlier, the DoF asked PAGCOR to make it a requirement for POGOs to be registered with the Bureau of Internal Revenue (BIR) before they are given a license to operate here.
“If we get all that (information), then it is possible that we can begin to collect taxes, enforcing the law on these foreign workers who are operating here,” Mr. Dominguez was quoted as saying.
Mr. Dominguez said he hopes to come up with a complete list of foreign POGO workers within 30 days.
He wants to start with requiring employers in the POGO industry to withhold a portion of their foreign workers’ salaries, for remission to the BIR.
According to DoJ data, 95,000 foreigners obtained temporary work permits as POGO employees as of June 2018. However, PAGCOR officials have cast doubt on that estimate as other foreign workers may have already secured special working permits or even alien employment permits from DoLE.
PAGCOR Chairperson Andrea D. Domingo has said that the gaming regulator does not track foreign workers’ visas.
Legislators have noted the increasing presence of foreign POGO workers — many of them Chinese — saying that they appear to be taking away jobs which can be filled by Filipinos. Chinese POGO workers have also been driving demand for residential property, particularly in the Manila Bay area which is close to the Entertainment City casino hub.
Meanwhile, the BIR is counting on the implementation of two tax amnesty programs to finally dispose of numerous tax evasion cases pending before the agency.
Finance Undersecretary Mark Dennis Y.C. Joven estimated the pending cases to be worth a total of P80 billion, representing tax delinquencies over the past decade.
“If at all, it increases. We also have the BIR batting average on tax evasion cases, which we know is not very good,” Mr. Joven said before the Tax Management Association of the Philippines last week. “So we needed a mechanism to ensure that we clear the dockets and free the time of BIR employees to proceed against really errant taxpayers and involving more recent cases.”
The estate tax amnesty will impose a flat rate of 6% for all unsettled estates or a minimum of P5,000, compared to the old regime that levies a range of 5-20%. The new law also provides for rates on delinquencies of 40%, 50%, or 60% of the basic tax depending on the charge. Meanwhile, unremitted withholding taxes will still have to be settled in full.
Malacañang removed the provision for a general tax amnesty when President Rodrigo R. Duterte signed Republic Act 11213 last month, in the absence of powers for the state to better run after tax evaders, including the relaxation of the deposit secrecy law and the automatic exchange of information with foreign tax authorities.
Mr. Joven said that while he does not expect to fully recover the amount lost to the veto, the tax agency still expects to collect a substantial sum from the amnesty. He added that the pending cases are classified into “highly-collectible” and “non-collectible” dues.
DoF estimates indicate that they expect to raise P21.26 billion from the amnesty on delinquencies, together with the P6.28 billion expected from the amnesty on overdue estate tax payments.
However, the P27.541-billion haul is less than half the P63.5-billion additional revenues expected from the original DoF proposal for a tax amnesty.