Philippines to crack down on tax-dodging POGOs

Philippine Finance Secretary Carlos Dominguez III has directed the Bureau of Internal Revenue (BIR) to shut down Philippine Offshore Gaming Operators (POGOs) that fail or refuse to pay the tax liabilities of their foreign workers.

Dominguez issued the order after discovering that POGOs had largely failed to pay workers’ income taxes, despite repeated warnings from the government. Total tax liabilities are estimated at P21.62 billion (approx. €374m).

Mr Dominguez told reporters that they are ready to “close down organizations that don’t withhold and remit the proper amount of taxes from their employees.” He also added that any offer to pay a lump sum to settle the matter, rather than the exact amount owed for each worker, must be rejected.

According to official stats, the Philippines’ POGO industry employs more than 130,000 non-Filipino workers, with the majority of them being Chinese nationals.

Furthermore, the country is likely to see an influx of new foreign workers – mainly Chinese nationals – from Cambodia, after it announced plans to shut down its igaming industry by the end of 2019 amid pressure from China, which is urging its neighbours to ban online gambling.

Philippines president Rodrigo Duterte has recently refused to implement a total ban, as shutting down the gambling sector would lead to widespread job losses. However, he also warned licensees to pay taxes or face regulatory action.

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