PAGCOR starts work to shut POGOs not paying taxes

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Metro Manila (CNN Philippines, September 17) — The Philippine Amusement and Gaming Corporation said it has started working on the call of the Finance department to shut down offshore gaming operators who refuse to pay taxes.

The statement of support comes after Finance Secretary Carlos Dominguez III ordered the closure of Philippine Offshore Gaming Operators or POGOs who are slow to pay ₱21.62 billion in total tax liabilities.

"We follow the law. BIR (Bureau of Internal Revenue) has the legal authority to close down establishments who evade taxes. PAGCOR supports this move," PAGCOR Chairman Andrea Domingo said in a statement. "We are issuing a letter to all POGO operators and service providers to this effect."

The BIR previously sent 130 letter notices to the concerned firms, but collections have been slow.

PAGCOR announced in August that they have stopped accepting new POGO applications, in the wake of growing concerns about national security. Defense Secretary Delfin Lorenzana earlier cautioned that foreign POGOs, mostly employing Chinese workers, may shift operations to spying. There have also been questions about POGOs located near military camps and even the Senate.

BIR Deputy Commissioner Arnel Guballa said the tax agency could not padlock the POGOs in question alone and sought the help of PAGCOR, the Department of Labor and Employment, and the Bureau of Immigration.

Of the taxes assessed from POGOs, the BIR said they were only able to collect about ₱2.1 billion so far: ₱175 million in withholding taxes for 2017, ₱579 million in 2018, and ₱1.4 billion from January to August this year.

This is far from the BIR's previous estimate of ₱2 billion in monthly income tax collections from foreigners working in POGOs.

POGOs are known to have recruited many Chinese nationals, thousands of whom are said to be working in the country illegally — without proper documentation and without paying the correct taxes. The government has since made it a requirement for foreigners to first secure a Tax Identification Number from the BIR before being granted a working visa here.

READ: Immigration requires foreigners to present TIN before getting work visas

Chinese President Xi Jinping has appealed to President Rodrigo Duterte to stop POGO operations entirely during their bilateral meeting last month in Beijing, noting that gambling is illegal in the Mainland. Malacañang said Duterte will "most likely" study the implications of a total ban on these online gaming hubs.

PH ambassador: China can't dictate closure of online gambling

Leechiu Property Consultants said in a report on Monday that POGO salaries are now bigger at $9 billion yearly, versus the $7.5 billion estimate for call centers and outsourcing offices.

On Tuesday, lawmakers filed a resolution seeking a Congressional probe into the POGO industry, saying that the reported offenses appear to be violating local immigration and labor laws.

"There is a clear need on the part of the House of Representatives to conduct an investigation regarding these allegations and the way that the government is handling the situation, in order to legislate measures that will clearly reguate the POGO industry," read the measure filed by Minority Leader and Manila Rep. Benny Abante, CIBAC Party-list Rep. Eddie Villanueva, Muntinlupa Rep. Ruffy Biazon, and Manila Rep. Manny Lopez.

CNN Philippines Correspondents Carolyn Bonquin and Xianne Arcangel contributed to this report.