Senate approves bill taxing POGOs, but critics warn anew of perils of gambling

THE Senate approved on second and third reading late Wednesday Senate Bill 2232, which amends the National Internal Revenue Code of 1997 to enable the taxation of Philippine Offshore Gaming Corporations (POGOs), from which the government is eyeing some P120 billion in revenue over the next four years. 

With 17 affirmative, 3 negative votes and zero abstentions on third reading, senators affirmed the desire of the Executive – earlier endorsed by the House of Representatives – to tax the POGOs in order to shore up the government’s revenue stream that had been badly eroded in the pandemic. This, while imposing tighter regulations on a sector that had spawned problems of peace and order, corruption and social ills.

The chamber was able to vote on the controversial measure on second and third readings in one sitting, skipping the three-day rule on voting, because President Duterte certified the bill as urgent on Monday, at the start of Congress’s last week of sessions before sine die adjournment from June 4 to July 25.

Among those who voted for the measure were Sen. Pia Cayetano, who sponsored the measure as Ways and Means committee head; Senate President Vicente Sotto III, Majority Leader Juan Miguel Zubiri; Senate President Pro Tempore Ralph Recto; and Senators Juan Edgardo Angara, Nancy Binay, Ronald dela Rosa, Richard Gordon, Imee Marcos, Grace Poe, Bong Revilla, Cynthia Villar, Joel Villanueva, Koko Pimentel, Christopher Go.

Voting against the measure were Minority Leader Franklin Drilon and his peers in the minority, Risa Hontiveros and Kiko Pangilinan.

In explaining his vote, Pangilinan said that in providing online gambling to aliens, POGOs “came with serious social costs,” citing, among others: spikes of as much as 61 percent in property prices, causing some property owners to kick out Filipinos from their homes in favor of very liquid POGO workers; various forms of corruption including bribery of immigration officers, money laundering and online fraud; and prostitution and human trafficking.

For Hontiveros, “gambling should not be a source of government funds, given its ties to organized crime.”

No bicam?

House Ways and Means Chairman Joey Sarte Salceda, principal author of the POGO bill in the House, earlier said the lower chamber is open to adopting the Senate version depending on its final outcome, if only to avert the need for a bicameral conference. 

“I want this bill passed as soon as possible, so I am open to recommending to the Speaker that we adopt the bill the Senate passes this afternoon,” Salceda said late Monday.

Under the version of the House which was passed in February, POGOs will be subject to a 5-percent tax on gross gaming receipts. Their service providers will be subject to regular taxes. Non-resident employees of both will be subject to a withholding tax of 25 percent of gross income, with a presumed income of P600,000. 

The Senate version adopted these rates in the committee report of the Ways and Means panel. 

During Wednesday’s marathon interpellation of sponsor Senator Cayetano, senators were bugged by what they deemed “unrealistic” and “unbelievable” figures given by state gaming agency Pagcor, thus making it hard for them to make educated guesses on what tax rates to apply.

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