Probe urged after Teddy Locsin’s post about tax-evading POGOs settling fees ‘under the table’

July 3, 2020 - 5:54 PM
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Teddy Locsin in office
Foreign Affairs Secretary Teodoro Locsin Jr. in his office at this photo uploaded by the Department of Foreign Affairs on Facebook on July 2, 2020. (Photo from Department of Foreign Affairs, Republic of the Philippines via Facebook)

A recent tweet of Foreign Affairs Secretary Teodoro Locsin about the Philippine offshore gaming operations or POGOs triggered calls for a probe into the supposed “under the table” transactions made in relation to tax compliance.

Locsin on Thursday responded to a Twitter user who was talking about taxes and some Chinese-run online gaming operations, who the user claimed was thinking of moving to Indonesia.

The Philippine Amusement and Gaming Corporation (PAGCOR) earlier revealed that two offshore gaming companies have left the country amid issues with tax compliance to the Bureau of Internal Revenue (BIR).

Jose S. Tria, Jr., PAGCOR assistant vice-president for Offshore Gaming and Licensing Department,  said that it was mainly due to the stringent tax rules of the BIR. He also cited the overhead costs they are required to pay despite an ongoing ban on some gambling activities.

“It won’t be easy, but I heard the eagerness to learn Mandarin is higher in Indonesia. Bahasa doesn’t have present/past/future tense like Chinese. They don’t expect to replace Chinese workers but at the very least they get some knowledge (speaking Chinese) transfer aside from taxes,” the Twitter user said in response to the DFA chief.

Locsin responded to him anew by tweeting: “The tax-evading POGOs did pay out as you must suspect but under the table which puzzled them. Usually they line up in a revenue office and pay up but this was special: collector whose affiliation to any department was kept a mystery turned up himself like home pick up.”

The DFA chief did not mention any names in his tweet but it concerned some Twitter users who were able to read his comment after it was picked up by a local news website.

“So Locsin has knowledge of this rort? Why did he not report it to his boss, discuss it in public, told a journalist about it, etc – so the proper actions may be done. I am not saying he is complicit, but what should we think then? LOCSIN is obliged to divulge everything!” a Twitter user pointed out.

Another online user questioned if it meant that Locsin could be a “whistleblower.”

“Pangalanan niyo po sino tumanggap nung ‘under the table’ payment. You have a duty to the country,” he responded to Locsin’s remarks.

A Twitter user believed that a Senate inquiry must be done to “have Locsin explain what he meant by POGOs paying under the table.”

Another online user likewise said that the allegation should be “further exposed” since POGOs have been linked to various controversies like sex traffickingkidnappingmoney launderingtax evasion and even alleged spying.

Others recalled the “slip of the tongue” made by presidential spokesperson Harry Roque in a virtual press briefing last April where he uttered that POGOs was supposedly part of an industry that gives “cash resources” to President Rodrigo Duterte.

Roque was addressing an inquiry from a journalist who asked whether POGOs were those who would remain close after April 30. At that time, Metro Manila was under enhanced community quarantine.

“So, ang POGO po kabahagi po iyan siguro ng isang industriya na nagbibigay ng cash resource sa president, sa ating pamahalaan, sa pamamagitan ng buwis at ang tatanungin po natin is ano iyong risk na pino-pose ng operation ng POGO?” he said to the journalist.

READ: ‘Slip of the tongue?’ Roque corrects self after saying POGOs give ‘cash resource’ to Duterte

Tax obligations 

The POGO industry, which was introduced to the country in 2016caused the sudden influx of Chinese nationals arriving in the Philippines. 

It’s one of the industries that was allowed to partially resume business in May, provided they settle their unpaid taxes to the government and follow stringent health protocols in light of the COVID-19 pandemic.

Last February, BIR said that POGOs owed the government P50 billion in the form of franchise, corporate and other taxes.  

Roque said that the collected tax revenues would be supposedly used to bankroll the government’s response efforts for the pandemic.

If they refuse to settle their tax liabilities, they would be encouraged to leave the country instead, he added.

The spokesperson reiterated that those who plan to move their operations outside the Philippines would still be obliged to pay taxes.