Philippines audit body urges action to collect $42.4m in overdue POGO taxes

PAGCOR

The Philippines leading audit body has urged the Philippines Amusement and Gaming Corp. (PAGCOR) to take urgent action to collect some PHP2.32 billion ($42.4 million) overdue taxes from offshore gaming companies.

In its annual audit the Philippines’ Commission on Audit found that at the end of last year, a total of PHP2.97 billion was uncollected from the Philippines Offshore Gaming Operators (POGOs). 

Of that amount, PHP2.32 billion, or 78 percent of the total were outstanding for more than a year, with some going back as far as 2017. The long-term delinquent payments rose 57 percent from the prior year. 

PAGCOR is the regulator for all gaming in the Philippines as well as operating casinos in its own right. The firm remits half of its gross revenue to the government for charitable projects. 

“The presence of substantial accounts receivable from POGOs has been a persistent issue for several years despite the existence of collection procedures,” it said. 

PAGCOR has explained that the failure to collect came because it has been fighting illegal gambling, trying to identify websites suspected of being linked to POGO licensees. In April and May 2018, PAGCOR billed the POGOs an estimated fee based on average income performance or average GGR for the past 30 days multiplied by the regulatory fee percentage since there was no definite amount of GGR from those suspected websites.     

The affected POGOs have filed a protest against the revenue demand and have not paid, PAGCOR said.

The COA found that out of the P2.328 billion accounts receivables outstanding for over 360 days, P815.9 million is under protest. 

It said that regulatory fees were not collected from the POGOs which had filed a protest against the billed amount resulting in a further loss of revenue of $14.3 million.

The audit body recommended that PAGCOR impose a protest fee before any POGOs can file a grievance and develop guidelines to relevant government agencies to stamp out illegal gambling.