In a very lopsided vote of 13 to 1, the Supreme Court justices sided with foreign-owned POGOs (Philippine Offshore Gaming Operators) as it decided to bar the Department of Finance (DoF) and its Bureau of Internal Revenue (BIR) from taxing the highly lucrative industry.
The DoF and the BIR had earlier moved to tax five percent of all collected bets by POGOs, which are largely run by Chinese investors.
The justices issued a TRO preventing the government from enforcing Section 11 of Bayanihan II, BIR Revenue Regulation 30-2020, and Memorandum Circulars 102-17 and 078-18. The decision sided with a petition filed by 14 POGOs, which called the BIR’s move “unreasonable.”
Bayanihan II was signed into law by President Rodrigo Duterte in September 2020. It extends his special powers and provides a P165 billion pandemic response fund, part of which was intended to be sourced from POGOs.
The 14 POGOs slammed the Bayanihan II, saying it shouldn’t be imposed on POGOs because it was only a temporary measure to generate funds for the country’s pandemic response.
The 14 POGOs released a statement saying Bayanihan II is unfair to POGOs because it seeks to tax wagers made through POGOs even as these bets are made outside the Philippines, and therefore, taxing them violates the territoriality principle of taxation.
