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PB2020-08: : TAXATION OF THE PHILIPPINE OFFSHORE GAMING INDUSTRY

Executive Order (EO) No. 13, issued in February 2017, aims to “strengthen the fight against illegal gambling” by clarifying the jurisdiction and authority of concerned agencies in the regulation and licensing of online gambling activities. Moreover, the EO seeks to strengthen the efforts of the national government in monitoring and collecting revenues from online gambling activities. Over time, it has become apparent that exacting benefits from the industry’s revenue and tax potential is proving to be difficult. Based on the estimates of the Bureau of Internal Revenue (BIR), unremitted tax collections from POGOs from 2018 to 2019 amounted to P83.6 billion. This is way below their actual tax payments of P8.8 billion representing franchise tax, value added tax, corporate income tax, withholding taxes and other taxes during the same period. House Bill No. 5777, already approved by the House Committee on Ways and Means, pursues to address the taxability of POGOs through amendments in the National Internal Revenue Code. Among others, HB No. 5777 requires foreign individuals employed by Offshore Gaming Licensees (OGL) to pay personal income tax of 25% on all income, compensation, allowances, and other remuneration received. Also, the proposed measure imposes a 5% excise tax based on gross gaming revenues or receipts to be remitted directly by PAGCOR or by the concerned Special Economic Zone Authority to BIR. Finally, HB 5777 clarifies that OGLs shall be considered engaged in doing business in the Philippines, hence liable to payment of proper taxes.

Congressional Policy, Budget and Research Department
Authors Keywords
Belleza, Marielle, R,; ; POGOs; online gambling;
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