Tax collection from offshore gaming to double this year
REVENUE generated from taxing offshore gaming operations here is expected to double in 2017, or less than a year since the industry was regulated, with the Philippine Amusement Gaming Corporation’s (PAGCOR) online gaming arm noting high demand for licenses.
PAGCOR’s recently established Philippine Offshore Gaming Operators (POGO) estimates that it generated around P3 million in taxes monthly solely from online gaming since the industry started coming under government supervision in December.
This number is seen to double to P6 million a month within the year, according to POGO Assistant Vice-President Jose S. Tria, Jr. in a roundtable discussion late Tuesday.
President Rodrigo R. Duterte upon taking office in June 2016, noted lax regulation of the industry and weak government collections , which led to the shuttering of some e-gaming sites.
However about a month later, Mr. Duterte softened his stance on the online gaming industry, stipulating that proper taxes need to be collected
To date, registered offshore gaming operators number 42 since POGO was established in September, with 44 more pending for PAGCOR approval.
However, actual revenue is still unclear as POGO is still in the process of installing an audit system to accurately and automatically account for actual revenue from the online gaming industry.
Mr. Trias said that as a result POGO won’t go all-out in accepting more industry entrants as it is focusing on the development of the audit system.
“The PAGCOR board is going slow on really opening up POGO because we want the audit system ready put in place to monitor them. So everything should be put in place first, then we open up (the industry),” he said.
In the meantime, Mr. Trias added that it is prioritizing applications for offshore gaming firms that have a sizeable number of tables and gaming machines.
Mr. Trias have not given a timetable for the system’s implementation, but he noted that it is still in the early stages of the procurement process.
Aside from the audit system, he said that POGO is also developing a probity check to ensure clean operations.
“We are prioritizing our audit system then the probity check, so we can see the connections of those applicants since it is possible that money laundering is involved. So we are getting independent probity checkers.”
Looking forward, he added that POGO aims to mete out the same treatment for online gaming and land-based gaming in terms of collecting revenue.
“Moving forward, PAGCOR wants to apply a percentage tax on POGO’s gross gaming revenue (GGR). So all gaming jurisdictions have the same 2% tax on GGR whether land based or online. But we still don’t have the platform for it,” he said.
Currently, offshore gaming operators pay a fixed tax depending on the number of tables and machines which is pooled into PAGCOR revenue. There is also a 5% tax rate on whatever it collects which is transmitted directly to the Bureau of Internal Revenue.
Online operators are charged taxes of $10,000 monthly per table for live studio gaming set ups, $5,000 monthly per table game machine, and a sports betting tax of $40,000 monthly.