POGOs can be taxed, Panelo rebuts OSG
By Prince Golez
Malacañang refuted the opinion of the Office of the Solicitor General (OSG) that Philippine offshore gaming operators (POGO) cannot be subject to tax.
Citing the National Internal Revenue Code (NIRC), Presidential Spokesperson Salvador Panelo said revenues from POGO operations are taxable.
“For POGOs that are domestic corporations, they are covered by Section 23 (E), Chapter II of the NIRC and their income shall be subjected to Philippine taxes regardless of whether the same was derived from a source outside of the Philippines,” said Panelo.
“As for those POGOs considered as foreign corporations, they too are taxable but only for income which they derived from sources within the country. This is pursuant to Section 23 (F), Chapter II of the NIRC,” he added.
Meanwhile, Panelo said the Department of Finance (DOF) has the competence to evaluate the respective charters and operations of these entities in order to subject them to Philippine taxes in accordance with the law.
“While the matter is being studied at length by the DOF, what is clear is that the State cannot be denied its right to collect on all applicable taxes on any entity or individual. This is particularly true with regard to the case of individuals working in these companies for certainly, their compensation, salaries or wages for the services they render here are considered taxable income under Section 23 (A) & (D) of the NIRC,” according to him.
“It has been pronounced by the Supreme Court, in a plethora of cases, that ‘Taxes are the nation’s lifeblood through which government agencies continue to operate and with which the State discharges its functions for the welfare of its constituents’,” he said.
Panelo likewise assured that the present government will ensure the fair collection of taxes due.
“In order to defray the expenses of the government, the State has, among its inherent powers, the authority to tax. This Administration will not be stymied nor estopped by technicalities caused by the exploitation of developing technologies in collecting what is due to the government,” he concluded.