A bill making its way through the Philippine Congress could have an everlasting impact on the Philippine Amusement and Gaming Corporation (PAGCOR). The bill would reportedly eliminate a 
tax incentive called the “in lieu of all taxes,” which is extended to an array of businesses and industries, including the country’s gaming regulator. If approved, it’s a sure bet that the gaming environment in the Philippines will change significantly.
PAGCOR now pays a flat 30% corporate income tax, as well as a 5% franchise tax on gross gaming revenue. This incentive was offered to a number of entities and makes it simpler for them to calculate taxes each year. Instead of paying all taxes based on income, the program participants know at all times what their tax liability is.
Under the bill currently being considered, House Bill 7214, the incentive could be removed. This would result in the entities being forced to pay taxes on any and all revenue in accordance with the Philippine’s Tax Code, including taxes on income from gaming operations.
The bill still has a long way to go before it is passed. According to Rolan L. Bentulan of KPMG, an international auditing and advisory firm, “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.”
PAGCOR is owned and controlled by the Philippines government. It operates a number of casinos and VIP slots clubs, as well as oversees and regulates privately owned casinos, eGames cafes and bingo parlors. A few months ago, President Duterte took a hard stance against the group, ousting two executives over allegations of corruption. At the time, the president stated, “I have fired and will fire tomorrow some more people.”
President Duterte doesn’t have much love for the gambling industry. Since he gained power in 2016, he has gone after several companies in the space, including PhilWeb and Galaxy Entertainment, to which a license application for a casino in Boracay was denied. Earlier this year, Duterte suspended all new casino licenses and last month he was quoted as saying, “I hate gambling. I do not want gambling. If you are thinking of a gambling place there, forget it. You are dreaming.”
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