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Duterte signs bill taxing offshore gaming operators

FREEPIK

PRESIDENT Rodrigo R. Duterte has signed into law a measure that will tax Philippine offshore gaming operators, according to the presidential palace.

“This is part of our strict regulation of all forms of gambling and prohibition of illegal betting,” Presidential Spokesperson Herminio “Harry” L. Roque, Jr. told an online news briefing in Filipino on Thursday.

The law imposes a 5% tax on gross gaming receipts of offshore gaming licensees and a 25% tax on gross income for nonresident aliens working for service providers of offshore gaming operators.

The minimum final withholding tax due every month should not be lower than P12,500, according to a copy of the law.

The law requires alien employees of offshore gaming companies to have a tax identification number. Violators will be fined P20,000.

Collections from offshore gaming operators will be used to fund universal healthcare (60%), health facilities (20%) and projects that will promote sustainable development goals (20%).

“President Duterte was very clear: He will only allow gaming if they pay the right taxes,” Albay Rep. Jose Maria Clemente S. Salceda, who heads the House Ways and Means Committee, said in a statement. “This will make sure they do.”

He said the most important aspect of the law is that offshore gaming operators are “doing business in the Philippines.”

“They cannot escape our jurisdiction or the reach of our tax authorities,” he said. “It is the single most consequential sentence in that law.”

Mr. Salceda said the government could generate P144.54 billion from the law in the next five years. “It could be bigger than some of the other tax reforms we enacted recently.”

The law will also boost the recovery of the property sector, Mr. Salceda said, noting that Philippine offshore gaming operators are a key part of office occupancy in Metro Manila.

Mr. Duterte in February 2018 ordered state-owned Philippine Amusement and Gaming Corp. to stop approving new casinos.

The operations of offshore gaming companies here were briefly suspended after a coronavirus pandemic hit in March 2020.

They were allowed to resume partial operations in May last year after being classified as business processing outsourcing companies, which are deemed essential to the economy.

Mr. Duterte last month said he would allow a casino to operate on Boracay island in central Philippines, citing the need to raise more funds for the government, which he said was running out of money. — Kyle Aristophere T. Atienza

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