By Rea Cu & Samuel P. Medenilla
THE Department of Finance (DOF) said an estimated P32 billion in additional income taxes can be collected annually from foreign nationals (FN) working for Philippine Offshore Gaming Operators (Pogo).
The interagency task force instructed to check the number of FNs employed in Pogos reported an initial list of 138,001 workers in the Internet-based operations, and it is estimated that the untapped subsector could yield an estimated P32 billion in additional income taxes annually for the government, the DOF said in a statement on Monday.
During a meeting with Finance Secretary Carlos G. Dominguez III last week, the Department of Labor and Employment (DOLE) and the Bureau of Immigration (BI) came up with a reconciled list of 138,001 workers, of which 54,241 were issued alien employment permits (AEPs) and another 83,760 granted special working permits (SWPs).
“What you have to do now is to reconcile the entire list. The maximum we know is 138,000. I have a suspicion that this figure is low,” Dominguez said.
Assuming that each foreign worker earns an average of $1,500 a month and is taxed at 25 percent of his or her gross income, Dominguez came up with a rough calculation of P32 billion a year in income taxes to be collected from these workers.
The finance chief also pointed out that the names on the submitted list have no Taxpayer Identification Numbers (TINs) and their corresponding salaries reported were only around P20,000 each per month, which was “ridiculously low” for skilled foreign workers for Pogos.
“Enforce the law so we can collect the tax,” Dominguez added.
BIR’s Guballa: checks to go back in years
Deputy Commissioner Arnel S.D. Guballa of the Bureau of Internal Revenue (BIR) said the agency will start working on the list to check how many years these workers have been here in the country and whether they have paid taxes for the last two taxable years.
Guballa said the Philippine Amusement and Gaming Corp. (Pagcor) has so far submitted a list of 126 out of 205 Pogos, which employ a total of 53,239 foreign workers with an average salary of about P41,000 each.
According to the BIR, other agencies such as the Department of Public Works and Highways (DPWH) submitted the names of 52 foreign workers; the Professional Regulation Commission (PRC) sent a list of 75 foreign workers; while the Clark Development Corp. (CDC), reported 2,463 foreign workers employed at the Clark and Subic special economic zones (SEZs).
The Philippine Economic Zone Authority (Peza) and the SEZs in Bataan, Aurora and in other locations all failed to submit their respective lists, Guballa said.
“We have all the data, we just have to put it all together,” Dominguez said.
The finance chief expects the interagency task force to come up with a cleaned-up, reconciled list in 30 days, in time for their next meeting.
Over the weekend, the DOLE said the government can soon start its stricter tax regime for foreign workers employed in Pogos upon the release of the master list consolidated by the interagency task force instructed to find out the total number of FNs working in the sector.
The BusinessMirror obtained a copy of the report, which showed a total of 76,936 individuals currently working in 165 service providers of Pogo.
At least 87.9 percent or 56,180 of the FNs in Pogo were Chinese, followed by the Vietnamese as a far second with 1,862 (2.9 percent) and Indonesians with 1,586 (2.5 percent). The rest of the FNs employed by Pogo include Taiwanese, Malaysian and Thai workers, among others.
More labor inspectors
Meanwhile, the labor department said the expected multibillion-peso tax collections from foreign workers in the Pogo sector will be used to hire an additional 5,000 labor inspectors.
On Monday, the Department of Labor and Employment (DOLE) said the new inspectors will help them in ensuring all foreign workers in the Pogo industry have the necessary work permits as stipulated in their master list.
“They will become part of our [regular] items since we really need them,” Labor Secretary Silvestre H. Bello III said in an interview.
DOLE said its current pool of 800 labor inspectors is not enough to allow the regular conduct of inspections of over 900,000 establishments nationwide.
Attempts by DOLE to ask Congress and the Department of Budget and Management (DBM) to allow it to employ more labor inspectors have been consistently denied due to lack of funding.
But last week, Bello said, no less than Finance Secretary Dominguez finally agreed to endorse to DBM their request for an additional 5,000 inspectors.
“He [Dominguez] computed it will cost the government only around P2.5 billion a year to hire the new inspectors. This is small compared to their expected tax revenues [to be collected from foreign Pogo workers],” Bello explained.
“Hopefully, we will make representations with DBM during the Cabinet meeting today [April 1],” he added. The Department of Finance (DOF) earlier said it is anticipating annual tax revenue of P22 billion from the tax collections from foreign workers, who are mostly Chinese, in Pogo firms.
Based on its initial master list, DOLE said there are currently 56,180 foreign nationals in the Pogo sector. This could still increase since DOLE is still waiting for the list of foreign workers from 27 licensed Pogos.
Crackdown on illegals
The head of the Senate Economic Affairs committee wants the government to crack down on foreign workers taking away jobs from the local labor force.
In a statement, Sen. Sherwin Gatchalian suggested that the Bureau of Immigration and the Department of Labor and Employment check out reports on the presence of aliens working in private construction sites.
Invoking Article XIII, Section 3, of the 1987 Constitution and DOLE Department Order 97-09 on the issuance of Alien Employment Permit, Gatchalian stressed, “it is the government’s duty to ensure that preferential treatment will be given to all Filipino workers in jobs that are available in the country—be it in construction sites or in office spaces.”
He added: “Kaya tayo nagtatrabaho na mapabuti ang ating ekonomiya at humihikayat ng mga mamumuhunan sa bansa ay upang makapagbigay tayo ng trabaho sa ating mga kababayan. Huwag sana nating hayaan na makuha ng dayuhan ang mga trabahong nakalaan para sa mga Pilipino sa sarili nilang bansa [We work hard to grow our economy and entice investors here so we can create jobs for our people. I hope we don’t allow aliens to simply grab jobs meant for Filipinos—in our own backyard].”
Image credits: Roy Domingo