Finance Secretary Carlos Dominguez III has said there will be no letup in the ongoing crackdown against tax-dodging Philippine Offshore Gaming Operators (POGOs) and their providers as the government aims to secure a fresh revenue source by collecting unpaid income taxes from these errant companies that mostly employ foreign nationals.
He said a task force led by the Bureau of Internal Revenue (BIR) has so far temporarily shuttered the operations of at least three tax-evading POGOs and collected an initial US$25 million (about P1.2 billion) from one of these online gaming companies.
“Basically we’re going hard against people who are evading taxes,” said Dominguez in a recent media interview.
Dominguez said it is unfair to Filipino taxpayers dutifully paying their taxes for these POGOs to continue with their tax-dodging practices.
According to the BIR, it has so far collected P1.63 billion in withholding taxes from POGOs and their service providers covering the period from January to August this year.
These online gaming firms paid P175 million in withholding taxes in 2017 and P579 million in 2018.
BIR deputy commissioner Arnel Guballa said the bureau has so far listed 218 POGOs and their service providers with a total of 108,914 foreign workers.
The BIR earlier ordered the temporary closure of the operations of the Great Empire Gaming and Amusement Corp. (GEGAC) on Sept. 25 for failure to pay the correct amount of taxes to the government.
After initially paying P250 million, and the issuance of an undertaking to settle its remaining tax arrears of P1.050 billion in three separate monthly payments covered by postdated checks, GEGAC was allowed by the BIR to resume operations last Sept. 27.
GEGAC was also required to update its withholding tax payments, and register its employees with the BIR.
Last Oct. 17, the BIR also padlocked the head office in Paranaque City, and branch in Pasay City, of Altech Innovations Business Outsourcing for the firm’s failure to register as a value-added tax (VAT) taxpayer, which is in violation of Section 115(b) in relation to Section 236 of the National Internal Revenue Code.
This morning, the BIR closed down the unregistered POGO branches of the New Oriental Club 88 Corporation in Paranaque City.
The shutdown of these firms was in compliance with Dominguez’s instructions for the BIR to crack down on POGOs and their service providers that fail or refuse to pay the tax liabilities of their foreign workers.
Dominguez has also ordered the BIR to file the appropriate cases against tax-dodging POGO firms.