Philippines Requires Registration for Offshore Gambling Workers
Due to several undocumented workers flowing in from China to take up jobs in the gambling industry, the Philippine Bureau of Internal Revenue (BIR) is now requiring all foreign and Philippines-based online gambling operators that are licensed by the Philippine Amusement and Gaming Corp (PAGCOR), now register with the tax bureau.
According to recent reports regarding the issue, more than 90% of all foreign nationals arrested or charged in the Philippines in 2018 originated from China. Most of the illegal Chinese nationals worked in the Philippine gambling industry.
It is illegal for Philippine residents to gamble online, though the government issues licenses to foreign and Philippine-based companies who offer their services to offshore online gamblers. These licensed operators are known as Philippine Offshore Gaming Operators (POGOs).
An estimated 100,000 Chinese nationals work within the gaming industry in the Philippines. PAGCOR conducted raids on more than 170 unlicensed operations between 2017 and 2018. Within those operations they discovered hundreds of Chinese workers that were detained due to not having the proper permits in order to work within the Philippines.
The majority of POGO’s customers are Chinese gamblers, so naturally they need a large number of employees who are fluent in Mandarin. For those in the country legally, such work is not a problem. However, because of a need for a constant influx of Mandarin-speaking workers, many undocumented workers see gambling sites’ call centers and live dealer casinos as a prime job opportunity.
Interagency Task Force on Illegal Workers
BIR recently announced an interagency task force to crack down on illegal immigrants from China. This task force is led by the Philippine Department of Labor and Employment and the Bureau of Immigration, but includes the Bureau of Internal Revenue and PACGOR as well. The purpose of the task force is to trace and monitor Chinese nationals currently, including those working in the nation’s online gambling industry.
BIR released a statement saying that all foreign and Philippines-based gambling companies should register with the tax agency, including those companies with offshore licenses. BIR says such declarations are now a requirement as part of obtaining the renewal of their licenses from PAGCOR. BIR also requests that PAGCOR not to issue licenses to online gambling operator unless clearance is secured from the tax agency.
Once declarations are made, operators found to have employed illegal Chinese nationals then will face the loss of their gaming license. Registering employees therefore is a way to compel companies to work within the laws.
When Companies Should Register Workers
The Philippine Department of Finance has mentioned that the registration should happen “on or before the commencement of business; or before payment of any tax due; or before or upon filing of any applicable tax return, statement or declaration.”
Arnel Guballa, Revenue Deputy Commissioner for Operations has said that all foreign and Philippine-based gaming operators are now required to register under Revenue Memorandum Circular 78-2018. Guballa said the circular covers POGOs outside the Philippines as well.
PACGOR Issues New POGO Gaming Licenses
PAGCOR offered licenses to new online gaming license applications since back in the fall of 2016. Since then, the Philippine gambling regulator issued more than 50 POGO licenses. Apparently, there is a high interest in the online gambling system and there might be more coming.
Arnel Guballa said POGOs have to behave like domestic business owners. Guballa stated, “Online activity is sufficient to constitute doing business in the Philippines, thus, a foreign corporation engaged in POGO is considered [a] resident foreign corporation engaged in business in the Philippines and not a non-resident foreign corporation.”
The crackdown on foreign nationals from China continues a hardline policy since 2017. The Chinese government expressed concern and disdain at times for the policy of detaining hundreds or even thousands of its citizens at a time in the online gambling raids. The Duterte government does not seem to mind the tension, because its actions are popular with rank-and-file Philippine residents. Like in other countries, illegal immigrants are seen as a cheap labor source by the workers of the country, and therefore competition for entry-level jobs.
If officials maintain discipline, the policy might work. Too many times in the past, Philippine officials have been susceptible to corruption, where they take money to look the other way. It is an issue which the Philippine Senate has engaged in public hearings over the past 5 years.