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Gaming Tax to Increase By 5% for Philippines POGO Companies

October 29, 2019

Philippines Offshore Gaming Operators (POGO) will possibly face increased taxes on their gross income. This also includes higher licensing fees. Joey Salceda who is the Philippines House Representative and a member of President Rodrigo Duterte’s ruling Democratic Party, presented legislation this week. The legislation aims to levy 5% tax on the company’s gaming income. The hike comes by categorising the licensed web-based gaming brand as resident corporations rather than of Philippines Amusement and Gaming Corporation (PAGCOR) recognised service providers.

PAGCOR controls land based and offshore gaming and runs its own casinos and satellite gaming places. The regulator step comes because POGOs had to deal with an inspection from China. The People’s Republic says that the Philippine websites that had to do with gaming illegally aimed at its residents. The citizens are prohibited from gambling there.

Philippines pogo businesses

China and Philippines POGO Conflict

The Chinese Embassy in the Philippines sent a devastating letter to PAGCOR and Duterte. The Embassy requested that they put in place stable and effective methods to discipline POGOs that allow bets from Chinese citizens. The statement issued by the Chinese Embassy said that Philippine casinos, POGO and other gambling companies are preying on residents of the country which has gravely tarnished China’s interest.

There has been a large sum of money unlawfully taken out of China into the Philippines. This has to do with cash laundering via underground banks which looks down upon China’s financial security. The Philippines own up to what they have done. Duterte met with China’s president, Xi Jinping. He said that the sixty licensed POGO businesses won’t be surprised because they require it to benefit the interest of their state. Durter asked the Department of Finance to research internet gaming businesses that don’t pay their taxes.

Revenue

Andre Domingo, chief of PAGCOR stands alongside Salceda’s bill and reckons that it’s a good thing. She said that the shift may produce a 100% POGO tax increase for the government. From January to August of this year, the Philippines Bureau of Internal Revenue (BIR) received $32 million in POGO revenue.

The immigration Bureau searched POGO operators in the western Philippines and captured 324 Chinese people. The people were charged with running illegal web-based gaming and other crimes a month ago. There are a lot of Chinese residents assumed to be working for Philippine POGO stores.