BIR shuts down another POGO service provider for ₱100-M unpaid taxes

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The Bureau of Internal Revenue has padlocked another firm providing services to a gaming operator based near Entertainment City for failing to pay about ₱100 million in value-added taxes.

Metro Manila (CNN Philippines, October 17) — The Bureau of Internal Revenue (BIR) padlocked another company providing services to an offshore gaming firm which has not paid about ₱100 million in taxes. 

BIR Deputy Commissioner Arnel Guballa and Department of Finance Assistant Secretary Tony Lambino led the shutdown of the head office of Altech Innovations Business Outsourcing in Aseana City in Parañaque and its branch at the Double Dragon Plaza in Pasay City. These are located near Entertainment City, which is touted as the gambling hub in Metro Manila.

Altech is one of the 218 accredited service providers to Philippine Offshore Gaming Operators (POGOs) under the watch of the Philippine Amusement and Gaming Corporation, data showed. Authorities discovered that the company has not registered with the BIR for its value-added tax collections, with its backlog estimated at ₱100 million.

The BIR discovered that the company is not registered as a VAT taxpayer, contrary to tax laws.

Altech is registered under the name of Jan Erick Lavariaz Altavas as sole proprietor, the BIR said in a statement.

Guballa said the service provider has about 1,000 employees, mostly Chinese nationals. He added that the BIR would also look into whether Altech has been remitting withholding income taxes of these foreign workers, as latest records show that payments are not complete.

The service provider follows the fate of Great Empire Gaming and Amusement Corporation (GEGAC), which was shut down by the BIR in September for owing about ₱1.3 billion to the Philippine government. The amount represents unremitted withholding taxes of GEGAC employees in 2018. BIR Commissioner Caesar Dulay said the firm was allowed to resume operations just days later as it promised to pay its dues, starting with a ₱250-million initial settlement plus post-dated checks due for the rest of 2019.

READ: PAGCOR starts work to shut POGOs not paying taxes

Last month, Finance Secretary Carlos Dominguez III ordered the closure of all POGOs and their service providers which failed to settle their tax liabilities. This came after the BIR reported that POGO firms were slow to pay ₱21.62 billion in cumulative tax dues demanded from 130 operators and service providers.

The Department of Finance estimates ₱2 billion in withholding taxes due from foreigners working in the POGO industry.

Guballa said he expects more POGO firms and service providers to pay their taxes right amid the crackdown.

"We are expecting an increase in voluntary compliance becuse of the enforcement activity that we are doing. We want to tell them, these service providers, that in the Philippines they should comply with our tax laws para walang problema [so there won't be problems]," Guballa added.