AS Finance Secretary Carlos Dominguez wants to remove some provisions in the bill providing for the fiscal regime for Philippine Offshore Gaming Operations (POGOs), the chairman of the House Committee on Ways and Means said Congress will respect any veto item that the Department of Finance (DOF) will propose to President Duterte.
According to Albay Rep. Joey Sarte Salceda, it is DOF’s prerogative to recommend line item veto to President Duterte.
Earlier, Dominguez said his agency is generally supportive of the POGO taxation bill as it will once and for all settle the tax treatment of POGOs and their employees, and address tax leakages in the industry.
However, Dominguez wants to remove provisions relating to zero-rating as stated in Sections 6 and 7 of Senate Bill 2232.
“We deem it necessary to remove the provisions relating to zero-rating of: (1) sales of goods to offshore gaming licensees (OGLs), regardless of location (Section 6 of Senate Bill 2232), and (2) services rendered by service providers to OGLs (Sec. 7 of SB 2332) because these provisions tend to place POGOs at a better footing than certain export oriented companies in the country,” Dominguez said.
Adopt Senate version?
Meanwhile, Salceda reiterated that the House leadership will adopt the POGO tax regime approved by the Senate when it resumes session.
“That [Senate] version contains only minor reworkings of the House version, and there is no difference between their tax rates and tax bases, and those of the House version. We were the first draft, and they made very few modifications. So, recognizing the respect that the Senate extended to the House version, we will adopt their changes, which in my view are acceptable,” he said.
Meanwhile, Salceda noted the major changes in the proposal.
The Senate version requires every alien employee of offshore gaming licensees (OGL) commonly known as POGO to have a Tax Identification Number (TIN) and imposes a P20,000 fine on the OGL for every alien employee without a TIN;
Also, the Senate version removes the provision that POGOs currently registered with other special economic zones will pay at their current tax rate or 5 percent of gross gaming revenues, whichever is higher, and instead makes the 5-percent rate uniform, saying “this is of little consequence.”
According to Salceda, the Senate version prevents the Aurora Pacific Economic Zone and Freeport from issuing new POGOs licenses and transfers POGOs currently registered under the zone to the regulatory ambit of the Philippine Amusement and Gaming Corporation.
“The Senate version does not specifically provide that the income reported by POGO employees for tax purposes can be used as basis for the computation of other mandatory contributions. We would have preferred that they keep this, but anyway, no one stops the other government corporations from using the presumptive income under the POGO tax regime as their basis for computing mandatory contributions,” he added.
“The taxable period for the Senate version, for both POGO taxes and employee taxes, is monthly. In the House version, the remittances of taxes for POGO employees is on a quarterly basis and in advance, with a refund mechanism if taxes paid exceed tax dues for actual period of service rendered by employees,” Salceda said.
The taxable period for POGOs in the House version is annual, as in the case of other corporations. “But we are amenable to the monthly system,” Salceda added.
POGO taxes will raise P13.4 billion in its first year, and P176.9 billion in five years, he noted.