Finance Secretary Carlos Dominguez III has directed the Bureau of Internal Revenue (BIR) to shut down the operations of Philippine Offshore Gaming Operators (POGOs) and their service providers that fail or refuse to pay the tax liabilities of their foreign workers and to file the appropriate cases against these tax-dodging firms.
Dominguez issued the order after learning from the BIR during a recent Department of Finance (DOF) Executive Committee (Execom) meeting of the slow pace of collections of withholding income taxes from POGOs despite the issuance of 130 letter-notices to these firms with tax liabilities amounting to P21.62 billion combined.
He reiterated his directive during a meeting held last Sept. 13 with members of an interagency task force monitoring the entry of foreign workers in the country.
"Why don't we start closing them down so they will answer these assessments," Dominguez said during the interagency meeting, "Those who don't pay or respond to your assessments, clamp them down."
BIR deputy commissioner Arnel Guballa said his office cannot do the job of padlocking errant POGOs alone and asked the assistance of the Department of Labor and Employment (DOLE), the Bureau of Immigration (BI) and the Philippine Amusement and Gaming Corp. (PAGCOR) in closing down errant POGOs.
During the interagency meeting, Guballa reported that POGO service providers paid P175 million in withholding taxes in 2017 and P579 million in 2018. From January to August 2019, the BIR collected P1.4 billion from POGOs, representing a 242 percent increase from the previous year's collections, Guballa said.
At the Execom meeting, Dominguez told the BIR to ensure that the payment of the tax liabilities should account for each foreign worker in POGOs and to reject any “lump sum” offer or any other arrangement in paying their tax arrears.
“The collection should be per individual,” the Finance chief said. “You force the issue and you bring them to court. I mean, close them down,” Dominguez told Commissioner Caesar Dulay and Guballa during the Execom meeting.