Pagcor willing to shut down POGOs if crimes, tax issues not resolved

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Metro Manila (CNN Philippines, March 4) — The Philippine Amusement and Gaming Corporation said it is willing to close down offshore gaming companies in the country if issues on unpaid taxes, labor, and a spike in crimes are not resolved.

Pagcor Assistant Vice President Jose Tria, Jr., who heads the licensing of Philippine Offshore Gaming Operators or POGOs, said the gaming regulator is open to calls to shut down these businesses in the country.

"We are openly coordinating with agencies na nagkakaproblema dito sa operations ng mga POGO sa Philippines. We are trying to help," Tria told CNN Philippines' Balitaan. "Kapag hindi talaga ma-resolve, we will look into closing down the operations of POGOs."

Pagcor stopped accepting new applications for POGO licenses in August last year amid growing concerns about job losses, unpaid taxes, and even on national security. Separate Senate investigations also unearthed a spike in cases of prostitution and human trafficking as women are brought in to cater to POGO workers. A Senate panel has also unearthed the "pastillas" scheme, where Chinese nationals pay grease money to enter the Philippines with great ease.

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Senators Risa Hontiveros, Joel Villanueva, and Franklin Drilon are among those calling to halt POGO operations, saying the industry brings more harm than good in the country. Drilon even said that the Philippines appeared to be a "laundromat" for dirty Chinese money, saying that ill-gotten funds are being funneled to POGOs to make it look like these came from legitimate sources.

Pagcor believes that the issues hounding the industry are not too big to resolve. However, Tria warned that closing down the 61 licensed POGO firms would mean lower revenues for the government.

"Ang nakikita naming trend, just like any other industry, ay papunta na sa online. If we do not look at this industry now and then talagang mag-convert into online gaming, mamamatay siguro ang mga land-based casinos natin dito. We will lose the chance to raise revenues," he said.

[Translation: The trend we are seeing, just like any other industry, is the shift to online (gaming). If we do not look at this industry now and there is widespread conversion to online gaming, maybe our land-based casinos will die.]

Tria said Pagcor collects taxes from POGO firms worth 2 percent of their gross gaming receipts every month. This is separate from the personal income taxes collected by the Bureau of Internal Revenue, which should be collected from the salaries given to POGO workers, most of them Chinese nationals.

Latest available government data show that POGO service providers had about 108,914 employees. The BIR issued 170 notices to collect P27.35 billion in tax liabilities from errant POGOs.

The agency shut down several POGO service providers in 2019 upon discovering that they have not been paying the right taxes to the government. These establishments were eventually allowed to resume operations upon reaching a tax settlement with the BIR.

Last year, the government made it a requirement for foreign POGO employees to secure taxpayer identification numbers before they are given work permits.

Finance Secretary Carlos Dominguez III earlier ordered a crackdown on POGOs not paying their dues, estimating about ₱2 billion in monthly income taxes uncollected from foreign workers in this sector. Agencies estimate about ₱50 billion in unpaid taxes from POGOs last year, against ₱6.42 billion collected by the BIR.