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September 26, 2022

Gov’t to regulate fees collected from POGOs

The government through the Fiscal Incentives Review Board (FIRB) is set to streamline and rationalize the huge fees collected by investment promotion agencies from registered Philippine offshore gaming operators (POGOs).

Finance Secretary and FIRB Chairperson Carlos Dominguez III has instructed the FIRB Secretariat to look into the inconsistent charges set by the investment promotion agencies with the end view of streamlining the collection and use of such fees charged investors or locators.

“Clearly, there is no uniformity in the fees charged by the investment promotion agencies to their registered POGO companies when in fact, they all fall under the same type of project,” FIRB Secretariat Head Juvy Danofrata said.

There are 32 POGO licensees and their service providers registered with the Cagayan Economic Zone Authority (CEZA), three service providers under the Authority of the Freeport Area of Bataan (AFAB), five under the Clark Development Corporation (CDC), and one registered service provider under the Subic Bay Metropolitan Authority (SBMA).

Likewise, for CEZA, registered POGOs are required to pay $200,000 for the application and processing fee and $500,000 to avail of a master license, which is applicable for interactive gaming and land-based casinos.

In terms of the application, processing, and renewal fees for e-casino and sports betting, the IPAs charge varying fees ranging from $10,000 to $25,000.

Meanwhile, for the POGO service providers including those offering business process outsourcing and information technology support services, the application, processing, and renewal fees normally range from $10,000 to $50,000.

Danofrata, who is also assistant secretary at the Department of Finance (DOF), said Section 297 (A) of the National Internal Revenue Code (NIRC) of 1997, as amended by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act has mandated the FIRB to exercise policy-making and oversight functions on the administration and grant of tax incentives.

Since the imposition of fees by the investment promotion agencies is an integral part of the incentivization process, the FIRB may prescribe the appropriate policy on how the agencies will charge their respective fees.

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