According to the Reuters news the Philippines' lower congressional chamber in Manila has passed a bill that will tax online gambling firms. The country is looking to bolster revenues in order to offset the lost funds created by the covid-19 pandemic situation.
Philippine offshore gambling operators offer online wagering to players in mainland China, although gambling is banned in China operators continue. The President of the South East Asian nation Rodrigo Duterte rejected China's call to ban such firms in 2019. The activity has created a demand for property and has stimulated retail spending in the Philippines since 2016. The reasons being the much needed jobs created and the revenue from fees subjected to the pastime.
The proposal by lawmakers sees offshore gambling licence holders paying 5% tax on gross gaming receipts and revenues from other services. It would also impose a 25% tax on gross annual income of foreign employees of the firms which is estimated at thousands of Chinese workers connected with the industry.
Although the upper chamber has not passed the counterpart bill both chambers will have to reconcile the bills before Duterte's signature is sought. Congressman Joey Salceda one of the proposed law’s authors said the bill would generate 144 billion pesos ($3 billion) in taxes annually. Lawmakers in the lower house approved on third and final reading the proposed new tax law.
Strict application of tax rules and a travel ban for thousands of mainland Chinese workers has prompted some online gambling firms to exit the jurisdiction last year. The regulator says that the new tax regime will not influence online gambling companies to exit the Philippines.
Jose Tria, the Philippines offshore gaming licensing chief, told Reuters, "Our operators are cognizant of their obligations to our government. All they want is a clear and fixed policy on taxation."
