PAGCOR open to working with agencies to stem illegal operations

The Philippine Amusement and Gaming Corporation stated that it will willingly close down offshore gaming companies in the Philippines if issues like unpaid taxes, labor and spike in crimes aren’t settled. PAGCOR’s Assistant Vice President, who is also in charge of gaming licensing, Jose Tria, said that the gaming regulator is open to calls to shut down businesses with anomalies in the country.

In his statement to the CNN Tria said ‘We are openly coordinating with agencies that are having problems with POGO operations in the Philippines. We are trying to help. If it is not resolved, we will look into closing down the operations of POGOs.’

PAGCOR has been keeping the applications from offshore gaming licences at a halt since August last year and things will stay this way until job losses, unpaid taxes and national security concerns have been all addressed. Senate investigations have also revealed another dark side to the industry where Chinese workers in the offshore gaming industry have resorted to online schemes to hire foreign women for sex.

Apart from uncovering this, the Senate panel also unearthed a scheme where Chinese nationals use their dirty money to enter the Philippines without facing any problems whatsoever, they call this the “pastillas” scheme.

Among those calling to stop POGO operations are Senators Risa Hontiveros, Joel Villanueva and Franklin Drilon. They claim that this industry is actually bringing more harm than good in the country and that the Philippines has literally became a “laundromat” for dirty Chinese money where POGOs play a huge role in laundering this money to make it look like it came from a licit source.

With POGOs becoming fronts for money laundering, the Bureau of Customs (BOC) proposed that all incoming passengers be required to declare the number of times they entered the country with cash of more than the $10,000 equivalent foreign currency allowed under the law.

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. He also comments on land-based casinos saying that if they don’t take care of the industry now, land-based casinos could be in for a bumpy ride. He goes on to say that PAGCOR had been collecting taxes from POGO firms worth 2 percent of their gross gaming receipts every month.

The collection of taxes from POGO firms 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.

The government made it a requirement for foreign POGO employees to secure taxpayer identification numbers last year. This is to be done before they are given work permits. POGOs not paying their dues, estimating about ?2 billion in monthly income taxes uncollected from foreign workers in this sector were ordered a crackdown by the finance secretary Carlos Dominguez III. Agencies estimate about ?50 billion in unpaid taxes from POGOs last year, against ?6.42 billion collected by the BIR.

The government published latest available data; this shows POGO service providers had about 108,914 employees. The BIR issued 170 notices to collect P27.35 billion in tax liabilities from errant POGOs.

Several POGO service providers were shut down in 2019 by the agency upon discovering that they had not been paying the right taxes to the government. When a tax settlement was eventually reached with BIR, these establishments were allowed to resume operations.

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