Malaysia is offering a ten-year tax moratorium to firms relocating from the Philippines on condition that at least 30% of employees are Malays
The Philippines has been the undisputed hub for online gambling in Asia ever since President Rodrigo Duterte started handing out casino licences in 2016. More than 300,000 foreign workers have moved to the metropolitan Manila area to work. This industry accounts for as much as 1% of the nation’s consumption spending.
The lockdown in Manila, has been weighing in on operations, said Ben Lee from Asian gaming consultancy IGamiX.
Additionally, the industry faced waves of pressure including the threat of higher taxes and calls for a gaming ban.
Philippines Offshore Gaming Operators were considered ‘unessential’ during lockdown, and could still only partially operate.
Two of the nation’s POGOs have decided to shut down and many are threatening to leave the Philippines as they don’t feel welcomed and costs of operating in Makati have risen drastically.
Malaysia, has now opened its doors to online gaming companies and is offering generous incentives to firms that relocate, such as a ten-year tax moratorium. This was written in the memorandum of understanding sent by PAGCOR’s Chairperson Andrea Domingo to the Office of President Duterte.
PAGCOR has been writing to the government in relation to the 5% franchise tax on gross gaming receipts. This followed recent departures of several online gaming firms from the Philippines due to the rising cost of doing business there.
Neither PAGCOR nor the Office of the President have responded to requests for comments.
In a rebuttal of PAGCOR’s claims on franchise tax, BIR Commissioner Caesar Dulay said he doubted Malaysia was offering licenses as all forms of gambling there is banned.
This statement isn’t true as Malaysia has land-based casinos, lottery shops (TOTO, Magnum and Damacai), Slot Clubs located at golf-clubs and horse racing betting.
Malaysia’s Deputy Minister of Communications and Multimedia, Datuk Zahidi Zainal Abidin, recently told national TV3 that he suggests it may be better to regulate and tax these online casino operations in Malaysia instead of tolerating illegal operations.
The government in Malaysia hopes to appoint an official government body to monitor, regulate, and tax the appropriate parties.
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