Philippines Bureau of Internal Revenue relaxes taxation on POGOs

BIR has reduced some tax requirements for POGOs to be able to resume their operations

POGOs operations have been suspended since March, following the memorandum issued by the Philippine Amusement and Gaming Corporation (PAGCOR), to suspend all land-based and online casino gaming operations as a response to the government’s call to prevent the spread of Covid-19.  

As reported by The Philippine Daily Inquirer, BIR Commissioner Caesar Dulay issued a memorandum dated 25 May and released last Friday, with a list of revised guidelines and requirements to be complied by POGOs and service providers before they could resume operations.  

However, BIR issued a different memo last May listing the original guidelines and requirements ordered by Head of POGO task force Deputy Commissioner Arnel Guballa. 

In a comparison by the news agency, both memos had attached list of conditions and documentary requirements. However, in the latter memo, the BIR removed specific coverage dates for franchise tax payments, while the earlier memo specified settlement of tax obligations for 2019 and 2020.  

Several other differences were noted by the news agency, including the earlier memo’s mandate for “submission of a notarised undertaking to pay tax arrears for prior years,” and later on, removing “for prior years” in the newly released memo.  

Early in May, PAGCOR allowed the resumption of operations for POGOs, following compliance for reopening. The regulator may only issue an Authority to Resume Operations (ARO) once a POGO or any of its service providers complied to the guidelines which included updating tax obligations to the government. The BIR noted that the POGOs are in the process of complying to the requirements two weeks after the announcement by PAGCOR. 

There were heated debates by Philippine lawmakers on taxation issues concerning POGOs, with some stating that all POGOs, whether domestic or foreign registered, are subject to the 5 percent franchise tax, so long as they are based and operating in the country.  

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