BIR remains steadfast on tax stance amid Pagcor’s clarification

TAGs: bureau of internal revenue, gambling, PAGCOR, Philippines

BIR-curveball-pagcor-licensesDespite Pagcor’s plans to appeal the Bureau of Internal Revenue’s corporate income tax edict, the latter appears to be holding firm on its position, reiterating what it previously said through its Memorandum Circular 33-2013, clarifying that Republic Act 9337 or the Expanded Value Added Tax Law removed Pacgor from the exempted GOCC list, thus requiring the agency to send a significant chunk of its revenue the government’s way.

Talking to the ABS-CBNnews, BIR Commissioner Kim Jacinto-Henares pointed out that the Supreme Court had already ruled on the issue and Pagcor and all its licensees have to follow it. “So far, the revenue circular that we’ve issued stays, nothing has changed,” she explained.

The source of this issue is the aforementioned Memorandum Circular 33-2013, required Pagcor and its licensees to pay 30 percent in corporate income tax, instead of the previously understood condition of paying 5-percent franchise tax on their gross gaming revenue, as well as 15 percent gaming revenue taxes on VIP gambling and 25 percent on mass-market gambling.

Last week, Pagcor chairman Cristiano Naguiat said that his agency is planning to appeal the circular and further put into question the long-standing debate on whether Pagcor and its licensees are subject to pay corporate income tax. The pressure is on Pagcor to get this whole thing sorted out because ultimately, its licensees will be looking to it for some assistance, especially after the latter was earlier told that they wouldn’t have to pay a hefty tax to operate their casinos in the country.

For now, the BIR is standing firm and until further notice, will impose its decision that Pagcor and its licensees will have to adhere to.


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