Pagcor and national auditor at loggerheads over tax due

In the Philippines the regulator-operator Pagcor (Philippine Gaming and Amusement Corporation) is arguing with the government’s Commission on Audit (COA) over the latter’s claim that P21 billion (US$393 million) is owed in unpaid remittances.

Pagcor disputes the claim, which the COA bases on Presidential Decree (P.D) 1869, under which the national government is entitled to a 50 percent share in Pagcor’s “aggregate gross earnings from its franchise.”

The national auditor says that Pagcor only remitted monies based on income from gaming operations, rather than its entire income – which includes earnings from processing fees, fines, penalties, rental and sales. It should therefore remit P21 billion to the Bureau of Treasury, and P1.6 billion to the Philippine Sports Commission (PSC.)

“If it is impractical due to huge amount involved as settlement would result to the abrupt depletion of PAGCOR earnings, we further recommended that Management request for the revision or repeal of the law through legislative process,” said COA.

Pagcor claims that under PSC regulations it is required to remit just 5 percent of revenues.

The auditor was additionally critical of Pagcor’s collection of offshore operator dues, revealing that 21 out of the 52 licensees did not settle their dues for a period of 1 to 10 months.

“Accounts receivable from Offshore Gaming Operators showed that out of its outstanding balance of P759.114 million as of December 31, 2017, the amount of P481.9 million or 63.48 percent remained uncollected/unremitted from one to 10 months but the licensees were permitted to operate, contrary to Section 28 of the Rules and Regulations for Philippine Offshore Gaming Operations (POGO),” the auditor alleged.

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