POGOs hire 80% foreigners, don’t pay tax bills

POGOs hire 80% foreigners, don't pay tax bills

One of the biggest defenses of the Philippine Offshore Gaming POGOs hire 80% foreigners, don't pay tax billsOperators (POGOs) that I could think of is that they are job creators. Thousands of Filipinos are being paid well to make the industry thrive in the Philippines, and that’s a good thing. Senator Joel Villanueva took a swipe at that theory recently, pointing out an imbalance created by hiring predominantly foreign employees.

8 out of 10 POGO jobs go to foreigners, Villanueva claims. According to December 2019 figures gathered by the Philippine Amusement and Gambling Corporation (PAGCOR), 17.7% of employees in the POGO industry are local, while 82.3% are foreigners. And as these are the numbers for the legitimate POGOs, Villanueva feared its worse in the black market.

“If legitimate Pogo companies in this sector employ few Filipinos, we can only surmise as to how worse it is in illegal Pogos,” Villanueva said in a statement Monday. “The data we have now is just the tip of the iceberg. It’s a grim picture of our labor force.”

Even without baseless speculation, the number is a clear problem. “This trend exactly presents a clear problem from a labor policy perspective,” said Villanueva on February 10.

Even with the hiring imbalance, there’s a bigger picture here Villanueva doesn’t discuss. Every POGO operation creates demand for service jobs which Filipinos presumably fill. Besides the obvious demand in real estate created, jobs spring up at restaurants, laundry services, banks, and more that just wouldn’t exist without the POGO industry. They may not pay as well, but it’s better than nothing.

But, while hiring too many foreigners may or may not be a problem, evading tax bills is unquestionably wrong.

During a Senate labor committee hearing on February 11, Attorney Sixto Dy Jr. of the Bureau of Internal Revenue (BIR) revealed that none of the foreign based POGOs are paying their franchise tax. The 50 foreign based first have helped build up a tax debt of PHP 50 billion ($990 million).

“Pagcor collected P8 billion at least as regulatory fee…that’s only two percent (of the operator’s gross gaming revenue). If it’s franchise tax of 5 percent, that would be at least 17 to 18 billion,” he noted.

PAGCOR promised to investigate the erring operators, and Dy promised that audits were on their way. “Those who did not pay, the bureau intends to issue letters of authority to audit them,” he said.