POGO revenue forecast set at P20B; actual 2019 collection only P6B –DOF

Government revenues from Philippine Offshore Gaming Operators (POGOs) should reach as much as P20 billion per year but collections only reached P6 billion in 2019, the Department of Finance reported Wednesday.

According to Finance Secretary Carlos Dominguez III, collections from POGOs only share a small part in government revenues.

"We know that we can probably get close to P20 billion a year, but we are not getting it. Last year we got P6 billion," he said during the Kapihan sa Manila Bay virtual briefing.

Dominguez said collections from POGOs amounted to P6 billion in 2019, and P1 billion in the years prior to that.

"We know that there are leakages in the POGOs especially, and that's why we have been trumping down on those leakages," he said.

The POGO industry, represented by the Accredited Service Providers Association of PAGCOR (ASPAP), said its members paid the required regulatory fees and the corporate and withholding taxes of their workers.

The Philippine Amusement and Gaming Corp. (PAGCOR) defines POGO service providers as "corporations which are registered in the Philippines that provide support to the operations of licensed operators in various areas of operations including customer relations, strategic support, IT support, and gaming software platform providers and live studio and streaming providers. They are classified under Business Process Outsourcing (BPO)."

Malacañang  earlier claimed that POGOs are classified as BPOs, but the IT and Business Process Association of the Philippines (IBPAP) rejected the classification.

"Tax revenues in the Philippines in 2020 was P2 trillion. You know how much we got from the casinos? Siguro mga P20 billion. It's not that much," said Dominguez.

"I mean, you know, it is nice, but compared to our own tax revenues and compared to the revenues we got from our other government activities, it's nice but it's not that big," he added.

Just last week, the Bureau of Internal Revenue (BIR) said legal issues are hampering the collection of franchise taxes from POGOs, who claim they should not be subjected to such taxes as they are non-resident corporations.
 

The Department of Finance in September 2019 already threatened to shut down POGOs with tax liabilities, with uncollected withholding income taxes then estimated at P21.62 billion. A number of POGOs have since been closed. —LBG, GMA News