The Philippines Passes New Online Gambling Tax Bill
Lawmakers in the Philippines have come up with a not-so-novel idea of how to overcome the country’s financial problems. Since the beginning of the pandemic, online gambling has garnered quite the high level of popularity in many countries. So, the solution to the financial issues is to tax the online gambling firms. That idea was passed by the Lower Congressional Chamber on Monday, Feb. 8.
A large number of online gambling sites are licensed in the Philippines but provide their services to offshore destinations – primarily China, where gambling is banned. These sites go by the term Philippine Offshore Gaming Operators (POGOs). And while China has tried to ban such activities from happening, Philippine President Rodrigo Duterte rejected that. According to the President, online gambling actually fuelled the nation’s property demand and retail spending. It also opened a selection of much-needed jobs for Filipinos.
On its third and final reading, the gambling tax bill was approved by lawmakers, and according to Congressman Joey Salceda, this would bring in taxes equating to 144 billion Philippine pesos (around £2.2 billion). That bill is yet to progress through the Upper Chamber, and if it does, Duterte will need to sign it into law, too.
If it is introduced, then offshore gambling licence holders will be required to pay a 5% tax on gross gaming receipts and revenue from other services. There will also be an additional tax of 25% on gross annual income from foreign POGO employees. All service providers would also be subject to regular corporate income, as well as to applicable local taxes.
Related:
- The Philippines Supreme Court blocks high taxes on gambling operators
- The Philippines to allow high-roller online gambling
Between 2016 and 2019, online gaming companies paid out 19 billion Philippine pesos (£286.5 million) to the country’s regulatory body, PAGCOR. However, lawmakers have stated that POGOs and service providers did not pay around $1.7 billion in taxes from 2018 and 2019. That being said, some online gaming firms were forced to close last year due to the crackdown on erring firms, as well as the introduction of tighter tax rules. A travel ban on thousands of mainland Chinese workers was also enforced. To compensate for the closure of land-based venues, the government of the Philippines approved online gambling instead.
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