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Taxation of foreign POGO workers to start this month

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indexTHE Bureau of Internal Revenue (BIR) will start to collect taxes this month from foreign workers employed by Philippine Offshore Gaming Operators (POGOs), Finance Secretary Carlos G. Dominguez III said. “I talked to the BIR end of last week and they said they are already in position to start collections from foreign workers in the POGO industry,” Mr. Dominguez told reporters in Pasay City on Monday. “BIR said they will start making the collections in July,” Mr. Dominguez added. He noted that the government foregoes revenue of about P2 billion a month for every 100,000 foreign workers that do not pay tax, amounting to P24 billion a year. Earlier, the BIR said that foreign nationals and non-residents planning to work in the Philippines should obtain a Taxpayer Identification Number (TIN) before securing a work permit. “Calls have been made for a public inquiry into the proliferation of foreign workers in the country,” the bureau has said.

The DoF led a task force to consolidate data on foreign workers. The initial finding turned up 138,000 foreigners, with 54,241 holding alien employment permits and 83,760 holding special working permits. The DoF estimates that foreign workers earning an average of $1,500 per month and taxed at 25% of gross income can generate P32 billion in taxes each year.

Citing data from the DOLE and the BI, the DOF said there are some 138,000 foreign nationals working for POGOs. Working on the assumption that each foreign national earns an average of $1,500 a month and taxed at 25% of gross income, the DOF came up with a rough calculation of P32 a billion a year in income tax collections. The number, however, does not include data from the Philippine Economic Zone Authority and the special economic zones in Bataan and in Aurora. “We cannot believe some of the claims that their salary is only $500 a month,” Dominguez said Monday, adding that advertisements in China entice workers to work in the Philippines for thousands of dollars.