Finance chief backs proposed tax on offshore gaming revenues

Robie de Guzman   •   October 22, 2019   •   381

Department of Finance (DOF) Secretary Carlos Dominguez III

MANILA, Philippines – The proposal to impose a five-percent tax on revenues generated by Philippine Offshore Gaming Operators (POGO) and their service providers is ‘a good idea,’ Department of Finance (DOF) Secretary Carlos Dominguez III said.

According to a statement released by DOF on Tuesday, Dominguez made the comment when asked about the proposal filed by Albay Representative Joey Salceda which seeks to impose a franchise tax on offshore gaming firms and register these companies as resident corporations as the basis for their taxability.

However, the finance chief pointed out that under existing revenue rules, POGOs are already subject to a 5-percent franchise tax.

“Yes, I haven’t seen the exact proposal, but in general, yes. I think that’s a good idea. But they are already paying a fee. A fee for that,” Dominguez was quoted as saying in a recent media interview.

The DOF cited in its statement the Bureau of Internal Revenue (BIR) Memorandum Circular No. 102-2017 which states that, “the entire gross gaming receipts/earnings or the agreed or pre-determined minimum monthly revenues/income from Gaming Operations under existing rules, whichever is higher, shall be subject to a Franchise Tax of five percent (5 percent), in lieu of all kind of taxes, levies, fees or assessments of any kind, nature or description.”

It also cited BIR data which showed that the government has so far collected P1.63 billion in withholding taxes from POGOs and their service providers from January to August this year.

These online gaming firms paid P175 million in withholding taxes in 2017 and P579 million in 2018, the DOF said.

The BIR has so far listed 218 POGOs and their service providers, employing a total of 108,914 foreign workers.

Manufacturers, importers of essential goods to get incentives during COVID-19 quarantine

Robie de Guzman   •   April 8, 2020

MANILA, Philippines – The Department of Trade and Industry (DTI) and the Department of Finance (DOF) said incentives have been granted to manufacturers and importers of essential products and equipment amid the Luzon-wide enhanced community quarantine against novel coronavirus disease (COVID-19).

Through Joint Memorandum Circular (JMC) No. 20-02, series of 2020 issued on April 1, the DTI and DOF said the manufacture and importation of critical goods and equipment shall be exempt from import duties, taxes and other fees.

“We need to ensure that the disruptions in the supply chain are minimized, as well as give enterprises a reprieve from commonly imposed taxes,” Trade Secretary Ramon Lopez said in a statement.

Under Republic Act No. 11469, otherwise known as “Bayanihan to Heal as One Act,” the DTI and DOF are authorized to liberalize the grant of incentives for the manufacture and importation of critical equipment or supplies.

In order to achieve this, the two agencies shall ensure the availability of essential goods and require businesses to prioritize contracts, subject to fair and reasonable terms, for materials and services needed by the government in its campaign against the COVID-19.

Finance Secretary Carlos Dominguez III, for his part, assured the government will help manufacturers, especially those working with medical institutions, in procuring or producing essential goods at reduced costs by providing them with tax breaks during this global health crisis.

“This is the least the Duterte administration could do to help our healthcare front-liners win the battle against COVID-19 by ensuring their access to personal protective equipment (PPEs) and other necessities to protect themselves and to medicines and medical supplies to treat their patients,” he said.

Lopez also mentioned that this was the government’s way of showing gratitude for the cooperation of enterprises despite the restricted movement and conditions imposed during the quarantine period.

The circular covers the production and manufacture of medicines identified as critical by the Department of Health (DOH), medical equipment and devices, personal protective equipment, surgical equipment and supplies, as well as laboratory equipment and its reagents.

It likewise covers raw materials and packaging materials exclusively used for the production of the above-mentioned products.

Among the provisions of the RA 11469 is for the government to collaborate with the private sector and other stakeholders to deliver these measures and programs quickly and efficiently.

Dominguez assured that the Bureau of Customs (BOC) will be able to assist in the timely release of the imports of raw materials, packaging, and articles required in the supply chain of production.

“We urge our partners in the private sector for their continued understanding on the importance of the unimpeded production and importation of these essential products,” Lopez said.

“We thank these manufacturers, institutions, and hospitals that continue to innovate and produce essential goods to help save Filipino lives in the face of the pandemic,” Dominguez said.

The circular shall remain in effect only during the effectivity of the Bayanihan to Heal as One Act.

DOF: P200B aid for 18 million poor families affected by COVID-19 to be distributed in next 2 months

Robie de Guzman   •   March 31, 2020

MANILA, Philippines – The Department of Finance (DOF) on Tuesday detailed the government’s plan to provide emergency subsidies worth P200 billion to some 18 million low-income households who lost their sources of income due to the novel coronavirus disease (COVID-19) crisis.

In a statement, Finance Secretary Carlos Dominguez III said the P200 billion program for distribution in cash, and basic needs over the next two months is the largest direct financial aid package ever granted by the government to Filipino families in the country’s history.

Dominguez said this is in line with the directive of President Rodrigo Duterte to give priority to providing a lifeline to Filipino households heavily affected by the COVID-19 pandemic.

“We need to take care of our people first because that is the primordial duty of the government and society, especially during crises such as this pandemic that has claimed the lives of over 30,000 worldwide and battered the global economy,” he said.

The fund for the subsidy program is sourced from the accounts of various government-owned and -controlled corporations (GOCC), and national government realigned to combat the coronavirus crisis.

The Republic Act 11469 or the Bayanihan to Heal as One Act, enacted on March 24, authorizes President Rodrigo Duterte to realign or reallocate savings generated from GOCCs, the 2020 national budget and extended 2019 budget to bankroll the emergency subsidy program.

Under the subsidy program, how much will each vulnerable household get from the government?

The DOF said that under the ‘Bayanihan’ law, the government will give P5,000 to P8,000 each month for two months. This is computed based on the minimum daily wage rates in their respective regions.

Who are the program’s beneficiaries?

The Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) on Tuesday released a list of target beneficiaries who could avail of the program:

The target beneficiaries are families who may have at least one member belonging to any of the following vulnerable or disadvantaged sectors:

  • Senior Citizens
  • Persons with Disability
  • Pregnant and Lactating Women
  • Solo Parents
  • Distressed overseas Filipinos (referring to those who were repatriated or banned from traveling outside the Philippines on account of COVID-19 breakout, from January 2020 until the lifting of the community quarantine)
  • Members of poor indigenous communities
  • Homeless
  • Informal economy workers (such as directly hired workers, subcontracted workers, homeworkers, house helpers, public utility drivers, micro-entrepreneurs with an asset of less than P100,000, street vendors)
  • Sub-minimum wage earners (such as dishwashers or helpers in carinderia or eateries)
  • Farmers, fisherfolks and farm workers
  • Employees affected by ‘no work, no pay’ policy
  • Workers not covered by DOLE adjustment measures program
  • Stranded workers who cannot return to their permanent homes at the moment

The DOF said that of these beneficiaries, 4.3 million families are recipients of the P2,150 average monthly subsidy from the Conditional Cash Transfer (CCT) component of the Department of Social Welfare and Development (DSWD)’s Pantawid Pamilyang Pilipino Program (4Ps) program.

“For those who are already receiving grants from various national and local programs, the government will provide them with a top-up or additional support to meet the P5,000 to P8,000 subsidy amount,” Dominguez said.

The DOF estimates that around P97.4 billion is needed per month to finance the subsidy, or almost P200 billion for two months, plus administrative costs totaling P5.1 billion.

“We will urgently deliver this emergency subsidy to millions of our fellow Filipinos who live day-to-day on subsistence earnings or ‘no-work, no-pay’ arrangements,” Dominguez said.

How will these subsidies be delivered to beneficiaries?

The DOF said the subsidies will be delivered through various national and local programs in the form of food, cash, and other essentials for the next two months, as provided in the ‘Bayanihan’ Law.

Is there an economic relief for affected businesses?

The DOF said they will eventually put in place programs for affected businesses “so the economy could bounce back as soon as we beat this lethal virus.”

“For the moment, the government must attend to dislocated families and keep Filipino workers healthy so they are ready for the subsequent resurgence in economic activity,” Dominguez said.

The Finance chief also appealed to private-sector employers to do their part in protecting the welfare of some 6.6 million Filipino families dependent on their businesses and who belong to the formal economy.

“We urge business leaders and enterprise owners to support their workers who may have savings, but might need additional assistance during this difficult time,” he said.

He also appealed to taxpayers who are still able to file and pay their taxes early to do so despite the one-month extension implemented under the ‘Bayanihan’ law in order to “fund these programs with the latest amount of borrowing.”

DOF ensures continuity of service as Manila office undergoes disinfection

Robie de Guzman   •   March 12, 2020

MANILA, Philippines – The Department of Finance (DOF) on Thursday assured continued service while its Manila office is closed for disinfection against the spread of novel coronavirus disease (COVID-19).

Finance Secretary Carlos Dominguez III said he has ordered the activation of an emergency working arrangement, which includes identified alternate locations where critical agency groups with skeletal forces will temporarily hold office.

“Under these arrangements, the DOF Building is abandoned and DOF holds office in alternate offices,” said Dominguez, who has gone under self-quarantine after learning he was exposed last week to a person who later tested positive for COVID-19.

DOF employees who will not be assigned to alternate offices will work from their homes for the duration of the office closure, the finance chief added.

Dominguez said the Policy Development and Management Services Group headed by Undersecretary Gil Beltran will determine the number of critical employees that can be accommodated in each of the alternate offices.

All undersecretaries have been directed to identify the critical offices and employees under their respective groups, collate the contact information of those working under them, and decide on how to issue instructions and receive outputs based on the facilities available to them.

“In view of limited working spaces, only critical employees and critical offices under each Undersecretary shall report for work in alternate offices. The rest will get instructions online and work in their respective homes,” Dominguez said.

DOF-attached agencies, including Bureau of Customs and Bureau of Internal Revenue, have also been ordered to thoroughly disinfect their respective premises this weekend.

Dominguez has also ordered the DOF-attached agencies—which include, among others, the BTr and the Bureaus of Customs (BOC) and of Internal Revenue (BIR)—to thoroughly disinfect all their respective premises this weekend.

Aside from the DOF, the Office of the President at Malacañan Palace; the offices of the Senate, Department of Budget and Management and Bangko Sentral ng Pilipinas (BSP) complex in Manila; Government Service Insurance System (GSIS) in Pasay City; and the Asian Development Bank (ADB) headquarters in Mandaluyong City will also be closed for disinfection.

Aside from Dominguez, BSP Governor Benjamin Diokno, Executive Secretary Salvador Medialdea, and Transportation Secretary Arthur Tugade also voluntarily underwent self-quarantine.

The World Health Organization has declared COVID-19 as a pandemic as the number of people infected grew to over 124,518 with 4,607 deaths in 118 countries.

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