Philippines Government imposes 5% online turnover tax for gambling to fund pandemic recovery

Objections over new  POGOs turnover tax from offshore operators met with overruling by the Philippine government

Last Saturday, Senate Minority Leader Franklin Drilon (seen below left), said that the Philippine government is going to impose a tax on POGOs (Philippine Offshore Gaming Operators). This tax is a 5% franchise tax on online gambling turnover rather than revenue, and there are already numerable objections to it from several companies.  

The Philippine Amusement and Gaming Corporation allegorically compared the changing of rules mid-game to the government’s imposition of the tax, but the Bureau of Internal Revenue (BIR) has insisted that this was stated clearly in a memorandum dating back to 2017.   

To quote, the law states that offshore gaming operators will now be subject to a “five percent franchise tax on the gross bets or turnovers or the agreed pre-determined minimum monthly revenues from gaming operations, whichever is higher, earned by offshore gaming licensees, including gaming operators, gaming agent, service providers and gaming support providers.” Any company that doesn’t comply will be stripped of its license by gaming regulator PAGCOR.  

The tax makers also considered the loophole of fluctuating currency differences, and so they added that the tax will “be computed on the peso equivalent of the foreign currency used, based on the prevailing official exchange rate at the time of payment, otherwise the same shall be considered as a fraudulent act constituting under-declaration of taxable receipts or income.”  

The past year hasn’t been so great for many Philippine-based operators because the pandemic lockdown forced them to reduce the expected numbers of their businesses, causing around a 100 POGOs to quit the Philippines. The turnover tax will definitely be another cause for many other POGOs to think twice about prolonging their stay, especially if the situation doesn’t seem to promise some sort of light at the end of the tunnel.

SiGMA Asia will launch in the Philippines, Manila, on the 27-28th of May 2021, at the SMX Convention Centre.  

About SiGMA Europe – Malta

SiGMA Group has announced the postponement of its Europe summit, which was planned to be held in Malta on 17-19 November 2020. The show will now open its doors early next year in February, running from the 16-18th, making it the first event to headline the 2021 gaming calendar.