PAGCOR could lose major tax incentive
The Philippine Amusement and Gaming Corporation (PAGCOR) are at risk of losing their tax exemptions due to a tax reform bill which is under review from Congress.
The Philippine Government is considering removing the “in lieu of all taxes” incentive which is currently used by many businesses including PAGCOR.
Rolan L Bentulan, a supervisor at the international auditing and advisory firm KPMG, told GGRAsia: “We may not know how this House Bill will turn out – it can emerge to be a completely different law in the end. However, we all hope that our legislators prudently consider the pros and cons of their proposed amendments.”
At the moment PAGCOR pays 30% corporate income tax and 5% franchise tax on its gross gaming revenue under section 13 of the 1869 Presidential Decree.
The new bill would reduce the corporate income tax from 30% to 25% which would lead to a loss in revenue for the government, one way to account for this is the removal of the “in lieu” tax incentive which according to the Philippine Star “will impact 51 incentive provisions and affect quite a number of industries and businesses”.
The National Congress is debating the removal of the incentive and could be approved in coming weeks.
If the incentive is removed then companies will be required to pay taxes on all revenue as laid out by the Philippine tax code.
The tax incentive was introduced and offered to a few businesses in order to make it easier for them to calculate their yearly taxes, instead of paying their taxes based on income.
This was done so that all participants in the incentive would know how much tax they owe the government.
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