Senate President Juan Miguel “Migz” Zubiri on Thursday welcomed the recent Supreme Court decision declaring as unconstitutional the provision in the Bayanihan Law II and revenue circulars imposing a 5 percent franchise tax on gross bets or turnovers from Philippine Offshore Gaming Operations.
“We respect the decision of the Supreme Court declaring the unconstitutionality of the POGO provision in the Bayanihan 2 Law as it finally puts to rest the applicable tax regime for offshore gaming activities,” Zubiri said in a statement.
“We note that the issue may have been rendered moot by the subsequent passage of the Republic Act No. 11590, otherwise known as ‘An Act Taxing Philippine Offshore Gaming Operations,’ which provides for the detailed tax obligations of the offshore gaming industry,” he added.
The statement stemmed after the SC declared Section 11(f) and (g) of the Bayanihan 2 Law unconstitutional for being “riders.”
Section 11(f) and(g) of the Bayanihan 2 Law provides a list of sources of fund to address the Covid-19 pandemic which includes the amounts derived from the five percent franchise tax on the gross bets from POGOs and income tax, value-added tax and other applicable taxes on income from non-gaming operations earned by POGO operators, agents, service providers and support providers.
Furthermore, the SC pointed out that in its previous ruling in Atitiw v. Zamora, it explained that the prohibition against riders “is to prevent hodge-podge or log-rolling legislation, and to ensure that all provisions of a statute have some reasonable relation to the subject matter as expressed in the title thereof.”
‘Hard look on POGO policies’
Zubiri reiterated his call for the government to take a “hard look at our POGO policy.”
“We have to undertake an in-depth review of the pros and cons of allowing POGOs to operate in our country in light of the recent spate of abduction cases and other established negative social costs,” he said.
Likewise, Senate Majority Leader Joel Villanueva echoed Zubiri’s call to review the country’s policies for the industry.
“We still have to re-examine our policy on online gambling. The question remains: Does revenue the government generates from POGOs outweigh the social costs of online gambling?” Villanueva said.
Earlier, the Department of Justice announced the summary deportation of around 2,000 illegal and overstaying workers employed by different POGO companies across the country.