Gov't to shut down POGOs with tax liabilities

The government threatened to shut down Philippine Offshore Gaming Operators (POGOs) that refused to pay their tax liabilities, the Department of Finance (DOF) said Sunday.

In an emailed statement, the DOF said Finance Secretary Carlos Dominguez III ordered the Bureau of Internal Revenue (BIR) to close down the tax-dodging POGOs.

"Why don't we start closing them down so they will answer these assessments... Those who don't pay or respond to your assessments, clamp them down," Dominguez had said during an Executive Committee meeting on September 13.

According to the DOF, the order was prompted by the "slow pace" of collections of withholding income taxes from POGOs despite the issuance of 130 letter-notices to firms with combined liabilities worth P21.62 billion.

"The collection should be per individual," Dominguez told BIR Commissioner Caesar Dulay and Deputy Commissioner Arnel Guballa during the meeting.

"You force the issue and you bring them to court. I mean, close them down," he emphasized.

The government in July started to impose stricter measures to collect proper taxes from foreigners working in the Philippines, including POGO employees.

The initiative is headed by a task force consisting of the Department of Labor and Employment (DOLE) Bureau of Immigration (BI), the Philippine Amusement and Gaming Corp. (PAGCOR), and the Bureau of Internal Revenue (BIR).

Citing data from the DOLE and the BI, the DOF said there were some 138,000 foreign nationals working for POGOs.

Working on the assumption that each foreign national earned an average of $1,500 a month and taxed at 25 percent of gross income, the DOF came up with a rough calculation of P32 a billion a year in income tax collections.

Earlier this month, President Rodrigo Duterte said the Philippines needed POGOs, citing the employment opportunities they provided Filipinos.

Last month, however, Defense Secretary Delfin Lorenzana expressed concern that Philippine Offshore Gaming Operators (POGOs)  — which tap mostly Chinese nationals — near military camps could easily become a breeding grounds for espionage.

Just last week, Department of Information and Communications Technology (DICT) Secretary Gregorio Honasan II said the government was looking at an inter-agency approach to boost the country's cybersecurity efforts amid an influx of foreign employees working for the POGO industry. — Jon Viktor Cabuenas/DVM, GMA News