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Philippine lawmakers found a solution to the country’s financial problems in taxing online gambling firms.
Since the beginning of the coronavirus pandemic, online gambling has become huge hit in the casino industry in many countries including the Philippines. On Monday, the country’s lower congressional chamber voted on a bill calling for the introduction of taxes on online gambling firms.
Philippines-licensed offshore gambling operators (POGOs) are online gambling companies that are known to be offering betting and casino experiences to customers mostly from China where gambling is banned altogether.
China made a call to ban such activities but in 2019 President Rodrigo Duterte rejected it. According to him, online gambling fueled the country’s property demand and retail spending and opened much needed jobs for residents of the South-East Asian nation.
Measure Approved
On the third and final reading, lawmakers approved the measure. According to Congressman Joey Salceda, one of the authors of the bill, it would generate PHP144 billion in taxes.
However, the bill has yet to be voted in the Upper Chamber. Both Chambers will have to approve the bill before seeking President Duterte’s signature.
The bill proposes that offshore gambling license holders would have to pay a 5% tax on gross gaming receipts and revenues from other services, as well as an additional 25% tax on gross annual income from foreign POGO employees.
All service providers would be subject to regular corporate income, as well as to applicable local taxes.
Online gaming firms paid PHP19 billion in fees to the Philippine gambling regulator, PAGCOR, between 2016 and 2019 but according to lawmakers, POGOs and service providers failed to pay around US$1.7 billion in taxes from 2018 and 2019.
However, some online gaming firms had to close last year due to a crackdown on erring firms, tighter implementation of tax rules and a travel ban on thousands of mainland Chinese workers.
Data from a poverty consultant firm showed that POGOs had to vacate 277,000 square meters of office space, equivalent to more than 25 soccer pitches in 2020. All that data showed the impact of the economic crisis the gambling industry in the Philippines had to face due to the pandemic.
As a compensation for the closing of venues, the Philippines’ government decided to approve online gaming so that customers could gamble remotely with some of the country’s casino resorts.
In December last year, integrated resorts were granted permission to offer online gambling. Three of the facilities are located in Manilla’s Entertainment City precinct. They are Solaire Resort & Casino, Okada Manila, and City of Dreams Manila.
These three and other casino resorts in the country are now conducting online gambling activities exclusively for Philippine high rollers under so-called Philippine Inland Gaming Operator (PIGO) licenses.
Source: “Philippine Lawmakers Pass Bill to Tax Online Gambling Firms”, Straits Times, February 8, 2021

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