Authorities crack down on offshore operators
The Philippines authorities have shut down the Altech Innovations Business Outsourcing (AIBC) Philippine Offshore Gambling Operator (POGO) after it failed to heed calls to pay its taxes. The Deputy Commissioner of Operations at the Bureau of Internal Revenue (BIR), Arnel Guballa, issued the order for its closure.
failure to comply with the 25% withholding tax
AIBC’s shutdown relates to its failure to comply with the 25% withholding tax that is levied on the salaries of foreign workers. The BIR has constantly reminded POGOs to pay their tax obligations, with any operators that fail to do so being shut down.
How the shutdown affected AIBC’s operations and employees
The Altech POGO branches, located in Pasay City and Parañaque, cannot reopen until the company settles its tax obligations. A POGO task force investigation is ongoing to identify any other potential tax liabilities that the company may owe.
the 700 foreign employees working with AIGC have not been detained
In his communication with local media, Guballa stated that, despite recent warnings, AIBC did not decide to register for tax.
The 700 foreign employees working with AIGC have not been detained as there is not enough space within the Bureau of Immigration’s detention facilities to house them.
Previous warnings issued
At the start of October, there was a fresh warning sent out to POGOs from the BIR. Commissioner Dulay said at the time that a heavy price would be paid, whether it was through fines or closures, by any non-tax complaint POGOs. The head of the Philippine Amusement and Gaming Corporation (PAGCOR), Andrea Domingo, also echoed this warning.
To date, the strategy has proven effective for the authorities. Tax revenues are increasing following the issuance of multiple warnings. Many POGOs are contacting the authorities to see how they can ensure they are compliant.
There are currently 218 POGOs in operation in the Philippines. The BIR hopes to generate around $468m annually from the 109,000 foreign workers employed by these businesses.
The online gambling scene in the Philippines
The gambling industry is a massive driver of revenue in the Philippines. In 2016, PAGCOR began issuing online gambling licenses. POGOs could not target those in the Philippines, but the licensing provided an ideal base to get into the Asian market.
In August, China called on the Philippines to completely ban online gambling. China was concerned that criminals were using gambling operations to embezzle funds. However, the Philippines refused to comply with this request.