Proposed 5% surcharge on game operators
Philippine offshore gaming operator POGO is keeping an eye on an imminent 5% additional tax on all gross revenue, not to mention increased licensing costs.
This comes after Congressman Joey Salceda introduced a bill earlier this month that would classify all POGOs as resident corporations rather than PAGCOR accredited service providers, meaning PGOs would be subject to additional taxation as they become taxable.
PAGCOR is a Philippine entertainment game company tasked with regulating both offshore and track and field games. The regulator showed its support for the bill along with its boss, Andrea Domingo, agreeing that it was a 'good idea.'
a new tax rate
Under the bill, game operators would have to pay $10,000 a month in taxes on all table games and an additional $5,000 a month on all RNG-based games, including slot machines. That's not all. Mr. Salcedo suggested he would have to pay an estimated $1,000 more in corporate taxes.
The head of PAGCOR added that regulators already have a new formula to use to calculate the minimum guarantee fee (MGF). This formula will likely boost the regulator's fee revenue to double the current MGF rate.
According to the Philippine Internal Revenue Service, the tax accountant was able to collect $1.63 billion ($32 million) in PHP from PGO in the period between January and August 2019, up from 2018 when it collected $579 million in PHP. The Philippines has 218 official PGOs with 108,914 foreign employees.
The Philippine government has also pledged support for the bill through the Treasury, saying Finance Minister Carlos Dominguez thinks it is a good move, despite him noting that POGO has already been hit with a 5% franchise tax.
Existing taxes have already failed to transfer taxes, causing problems for the pogo industry as several businesses have closed. The government has said it will allow businesses to reopen only after agreeing to a payment plan.
the Philippine government under external pressure
The new increase comes after intense pressure from the Chinese government, which has accused game sites based in the Philippines of illegally targeting their citizens. In fact, PAGCOR later received a letter from the Chinese embassy, which saw Philippine President Duterte issuing guidelines that would ensure that illegal businesses would be punished for accepting Chinese customers. 바다이야기
In the letter, the Chinese embassy said China's interests had been severely undermined by illegal operators in the Philippines. Under Duterte's direction, the Immigration Bureau seized control of eight POGO businesses believed to be operating illegally in Puerto Princesa.