21-7-2023 (MANILA) Tax revenues collected from Philippine offshore gaming operators (POGOs) surged in 2022, despite controversy surrounding the industry. This was partly on the back of a reopened economy and pandemic-era reforms that sought to squeeze more revenues from the sector.
According to data sent by the Department of Finance, total tax revenues from POGOs skyrocketed by 127% year-on-year to P8.878 billion (S$214 million) in 2022. This was significantly larger compared to the P3.91 billion (S$94.7mil) collected in 2021.
In 2022, POGOs paid P805.9 million (S$19.6 million) in income tax, and shelled out P43.2 million (S$1mil) for business tax. Gaming taxes collected from the sector generated a total of P3.65 billion (S$88.7mil).
The offshore gaming industry has been mired in scandal since rising to prominence in past years. While POGOs generate guaranteed revenues for the government, they have been criticized for their links to money laundering and crime syndicates. At the same time, the real estate industry has benefited from POGOs, with the sector occupying 5% of total leasable office spaces across the country.
Despite this, the sector has suffered heavy losses throughout the pandemic, with mobility restrictions leaving gaming houses virtually empty. In June, Finance Secretary Benjamin Diokno said he wanted to bid farewell to POGOs, citing reputational risks and social costs that came with their presence.
Diokno raised concerns about why the Philippines remained on the Financial Action Task Force’s “gray list,” as the Anti-Money Laundering Council had flagged security concerns in the sector back in March 2020, revealing that some transactions from POGOs had alleged links to drug trafficking.
Despite this, the national government effectively legalized the presence of POGOs by imposing tax rates on the sector. Diokno has said that the government could “get revenues from lots of other sources.”
