‘POGOs to cushion losses from Citira’
Credit to Author: Tyrone Jasper C. Piad| Date: Tue, 14 Jan 2020 16:24:56 +0000
TAXES collected from Philippine offshore gaming operators (POGOs) could cushion potential losses due to uncertainties over the government’s second tax reform package, First Metro Investment Corp. (FMIC) said on Tuesday.
“It [the POGO sector] is going to be helpful in terms of axing potential losses from Citira [Corporate Income Tax and Incentives Rationalization Act] and other provisions of the tax reform package that might reduce the revenue intake,” FMIC Vice President Cristina Ulang said during a briefing.
According to her, the tax base could grow as high as P24 billion annually — or P2 billion monthly — which is estimated to be 2 percent of the country’s gross domestic product.
As of end-September 2019, the Bureau of Internal Revenue said taxes from POGO workers hit P1.79 billion.
“I think it is nice to know [that] the government has [recognized] casino gaming [operators] — the POGOs — as [contributors] to fiscal sustainability,” she said.
Citira aims to reduce corporate income tax from 30 percent to 20 percent in 10 years and remove the 5-percent tax on gross income earned currently enjoyed by select firms.
While there are no specific figures yet for total losses, Philippine Ecozones Association President Francisco Zaldarriaga said earlier that uncertainties caused by Citira were prompting existing investors to postpone expansion plans and were scaring off potential new ones.
There were also reports of regional headquarters moving to other Southeast Asian countries because of worries over Citira.
For his part, FMIC Chairman Francisco Sebastian commended the government for finally taking control over the sector by regulating taxes and benefits.
“As long as we manage this business well and they pay their taxes and they get their proper visa… I think we should take advantage of the situation,” Sebastian said.
“There could be a risk that they may go away for a certain time, but that doesn’t mean that we shouldn’t do it,” he added.
POGOs drove demand for office spaces last year, accounting for more than 40 percent of the takeup, according to Leechiu Property Consultants.
POGO clients occupied 738,000 square meters out of the 1.7-million-sqm total takeup last year, the property consultancy firm said.