Philippine-licensed online gambling operators risk being ‘slapped’ or ‘shot’ by President Rodrigo Duterte if they fail to resolve any outstanding tax obligations post-haste.
Last Friday, President Duterte gave an interview to CNN Philippines in which he gave the nation’s Philippine Offshore Gaming Operators (POGO) just 24 hours in which to resolve any outstanding tax obligations with the Bureau of Internal Revenue (BIR).
However, just moments later, Duterte extended this deadline to “at least three days,” which he described as “good enough” to accomplish the task. This 72-hour window will have closed by the end of Monday, so it remains to be seen whether Tuesday will bring a flurry of new raids on POGO operators.
The POGO industry has come under increased scrutiny by local authorities following years of dramatic expansion. Just days before Duterte’s interview, agents from the BIR and other regulatory agencies raided the offices of New Oriental Club 88 Corporation, a major POGO support services provider, for allegedly failing to register its operations with the BIR.
In delivering his ultimatum, Duterte employed his traditionally ‘colorful’ language, using the Philippine word for quail (pugu) to threaten to “shoot” noncompliant POGO operators like they were birds. Duterte warned POGOs not to test him on this score, insisting that Filipinos weren’t fools and he’d personally “slap” any POGO operator that tried to pull the wool over his eyes.
Taxation of POGOs has become a hot topic in the Philippine legislature, with proposals to impose a variety of levies on the sector to ensure the government was getting a proper share of online gambling revenue.
Not everyone is baying for POGO blood. The head of the Philippine Amusement and Gaming Corporation (PAGCOR), which oversees POGO licensing and regulation, recently expressed concerns that squeezing licensed online operators too hard will only result in further growth of the unauthorized online sector, from which the government earns squat.
The Department of Finance has stated that the POGO crackdown had so far provided the government with an additional P1.2b (US$25m) in additional revenue. Most of this sum came following a September raid on offices of Great Empire Gaming and Amusement Corporation, which was only allowed to restart its operations after coming to terms with the BIR.
Colliers International Philippines reported last week that the POGO sector now accounts for “about 10% of total leasable office in Metro Manila.” Over the first months of 2019, POGO-related transactions accounted for “37% of all closed deals” and Colliers predicted that POGOs would continue to “lead office space take-up over the next two to three years.” That is, unless the sector gets spooked and goes off in search of a more tolerant regulatory climate.
