By Beatrice M. Laforga, September 16 2019; Business World
Image Credit to Business World
THE FINANCE DEPARTMENT (DoF) is turning up the heat on Philippine Offshore Gaming Operators (POGOs) found evading taxes due their foreign workers in the country by threatening to shut them down and sue them in court.
A DoF press statement on Sunday said Finance Secretary Carlos G. Dominguez III gave this order after a meeting with Bureau of Internal Revenue (BIR) brass on Friday wherein taxmen reported “the slow pace of collection of withholding income taxes from POGOs despite the issuance of 130 letter-notices to these firms” with P21.62 billion in cumulative tax liabilities.
“Why don’t we start closing them down so they will answer these assessments… Those who don’t pay or respond to your assessments, clamp them down,” Mr. Dominguez told officials of the task force monitoring the entry of POGO foreign workers at the meeting.
He told reporters in a mobile phone message over the weekend that the government will start this phase of its crackdown “as soon as possible.”
“What was discussed last Friday afternoon was essentially what Sec. Dominguez shared via SMS. He said the closing down of errant operators will start ASAP,” Finance Assistant Secretary Antonio Joselito G. Lambino II said in a mobile phone message on Sunday.
Field teams will consist of representatives of the BIR, the Department of Labor and Employment (DoLE), the Bureau of Immigration and the Philippine Amusement and Gaming Corp. (PAGCOR).
BIR Deputy Commissioner Arnel S.D. Guballa reported that from January to August, the government collected P1.4 billion in withholding taxes from POGOs, already more than double the P579 million collected last year and the P175 million in 2017.
Mr. Dominguez also told BIR top officials to reject offers of “lump sum” or any negotiations for settlement with erring POGOs.
“The collection should be per individual,” he told BIR Commissioner Caesar R. Dulay and Mr. Guballa in that meeting.
“You force the issue and bring them to court,” Mr. Dominguez said.
“I mean, close them down.”
The BIR and DoLE in April formed a task force to consolidate data on foreign workers employed by POGOs.
BIR started collecting taxes from POGO workers last July and ordered erring companies to remit withholding taxes from the workers by Aug. 10.
DoF had estimated that the government loses P24 billion annually in foregone personal income taxes for every 100,000 unregistered POGO workers.
In an Aug. 19 press briefing, PAGCOR announced that it will stop accepting new applications for offshore gaming licenses. PAGCOR Chairperson Andrea D. Domingo told reporters then that the moratorium could last until the end of the year. POGOs in the country now number 61, if the current three pending applications were to be approved.
The DoF said in a separate press release on Sunday that Mr. Dominguez met with former top economic officials of the Executive branch of government as well as Ways and Means committee chairpersons Senator Pia S. Cayetano and Albay 2nd District Rep. Joey S. Salceda of the Senate and the House of Representatives over lunch on Friday to discuss the current government’s plans for making overall economic growth pick up from last semester’s disappointing 5.5% average.
The government has a 6-7% gross domestic product growth target for this year, and Socioeconomic Planning Secretary Ernesto M. Pernia has said it will take a 6.4% average pace this semester to hit the lower end of that goal, which Mr. Dominguez described as a “fighting target.”
The Finance chief said that in order to avoid a recurrence of late national budget enactment that led to the growth slowdown last semester from 6.3% a year ago, leaders of both chambers of Congress have been meeting every month to monitor progress of action on the proposed P4.1-trillion national budget for 2020 and the 25 priority measures President Rodrigo R. Duterte had enumerated in his July 22 fourth State of the Nation Address. — Beatrice M. Laforga