A new law could make offshore gaming operators in the Philippines pay a 5% additional tax on their gross gaming revenue. The move is being taken to counter China’s increasing dissatisfaction with Philippine firms targeting their citizens.

New tax to be debated soon

Philippine Offshore Gambling Operators (POGOs) have recently faced intense pressure from the authorities. Joey Salceda, Albey Representative, unveiled a new law that could make the industry pay extra taxes on their employees working in the Philippines. The legislation takes into account the fact that many licensed gaming operators are molding their corporate classification to resident corporations. They should be categorized as PAGCOR-accredited service providers instead.

The Philippine Amusement and Gaming Corporation (PAGCOR) supervises and regulates privately-owned casinos in the country apart from running its own. It also monitors e-game cafes and 180 bingo parlors.

Salceda proposes that the employees of POGO companies are based in the Philippines. These firms conduct their business from the country as well. Therefore, the workers’ incomes should be taxed by the government. He suggests that the law should mandate a well-defined tax code for the staff’s income. His legislation, House Bill 5267, could add a 5% tax on the gross gaming revenue of POGO firms. This step was previously proposed by the Bureau of Internal Revenue (BIR).

Additionally, the gaming firms will pay 15% fees on all types of workforce compensation- including but not limited to wages, salaries, and annuities. The bill will allow for POGO employee tracking as well. Salceda’s bill doesn’t stop here. It proposed a $10,000 per month fee for each live remote table game dealer and a $5,000 fee on a random number generated (RNG) game. He suggests that a proper tax code like this will provide the government more flexibility in regulating this sector, enforcing rules and earning a better revenue.

The Philippines follows China’s footsteps

Philippines wants to regulate its gaming industry because of recent scuffles with China that is not happy with POGO companies targeting their citizens. The Chinese Embassy in the Philippines has demanded productive measures that restrict POGOs from accepting bets by Chinese customers. The Asian heavyweight also warned that POGOs are threatening China’s financial safety because of the large amount of illegal funds flowing into the Philippines. It included money-laundering allegations as well.

Chinese President Xi Jinping met Philippian president Rodrigo Duterte to discuss the impact of 60 POGO firms. They decided that these operators will face sanctions instead of a total shutdown. The Philippines will also try to remove Chinese employees at these firms. Last month, 324 Chinese individuals faced detention after raids at over half a dozen POGOs.