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Senate may follow House in passing POGO tax measure

THE SENATE may also pass a measure taxing Philippine Offshore Gaming Operators (POGOs), after the House of Representatives approved on third reading a bill taxing foreign POGO staff.

Senate President Vicente C. Sotto III told BusinessWorld in a Viber message Tuesday that the Senate will “most probably” also pass a bill taxing POGO workers.

Senate President Pro Tempore Ralph G. Recto said he has filed a bill imposing a 30% tax rate on the POGO industry.

“Surely, we can reconcile both bills,” Mr. Recto said in a text message Tuesday.

“Government needs all the taxes/revenue it can collect from the industry,” he added.

Senator Juan Edgardo M. Angara, vice chairman of the Ways and Means committee, said he “personally supports a measure that will put the industry on a clearer footing fiscally since there is some debate as to which taxes are due.”

“It is better to have a regulated and supervised gaming industry rather than one that exists underground,” he said in a text message.

Mr. Recto in January 2020 filed Senate Bill No. 1295 aiming “to establish the tax regime” for POGOs, to be incorporated in the National Internal Revenue Code (NIRC).

Under the measure, which is pending at the committee level, Philippine-based and overseas POGOs are subject to an income tax rate of 30%.

The measure also seeks to impose a franchise tax equivalent to 5% of gross receipts derived from offshore gaming operations.

Mr. Recto said that in his explanatory note that “peculiarity of the nature of its business activity creates confusion in the enforcement of our existing tax laws.”

Inclusion in the Tax Code “is necessary to remove any doubt and avoid confusion whether or not POGOs are taxable in our jurisdiction,” according to the note.

The House of Representatives on Monday approved House Bill (HB) No. 5777, amending the NIRC to tax persons engaged in POGOs.

The bill will require foreigners employed by offshore gaming operators in the Philippines to pay a final withholding tax of 25% of their income.

It also wants to impose 5% excise tax on the gross revenue or receipts from POGO gaming operations.

The House of Representatives on Tuesday informed the Senate its approval of HB 5777. — Vann Marlo M. Villegas

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