The House Committee on Ways and Means unanimously approved yesterday a bill seeking to impose a five percent franchise tax on all offshore gaming companies on gross receipts derived from gaming operations.
In less than 30 minutes, the House panel, chaired by Albay Rep. Joey Salceda, approved House Bill 5267, which seeks to amend Sections 22, 25, and 119 of the National Internal Revenue Code of 1997, as amended, upon the motion of House Deputy Speaker and Surigao del Sur Rep. Prospero Pichay Jr.
The passage of HB 5267 was made amid the opinion of the Office of the Solicitor General that the POGOs cannot be taxed, citing the “source of income” principle under the Revenue Code.
Salceda explained that under the measure, a five percent franchise tax is imposed directly on gross winnings of the Philippine Offshore Gaming Operations licensed by the Philippine Amusement and Gaming Corp. “This will raise R45 billion (in revenues) for the national government,” he said.
Currenty, Pagcor imposes two percent regulatory fee on POGOs.
Salceda said his panel also decided to impose a 25 percent withholding tax on foreign national employed in the Philippines by an offshore gaming licensee with a minimum threshold of P600,000 per annum, instead of 15 percent tax, which was originally proposed.
The panel agreed to increase the minimum threshold to P600,000 per annum from the originally proposed P250,000, which means foreign employees who work for POGOs who have a minimum annual income of P600,000 shall pay an additional 25 percent tax on their salaries, wages, annuities, compensation, remuneration, honoraria, and allowances. (Charissa L. Atienza)
