Press Release
September 12, 2020

Bayanihan 2 to yield P17.5-B revenues from POGO, paves way for faster telco towers construction, says Drilon
The minority leader's amendments in the law ensures higher taxes from POGO, faster building of telco towers

The newly-signed Bayanihan to Recover as One Act will raise P17.5 billion in additional revenues from Philippine Offshore Gaming Operators (POGO) and fast-track the construction of telecommunication towers in the country, according to Senate Minority Leader Franklin M. Drilon, who proposed the two most significant provisions of the law.

Drilon welcomed the signing of the Bayanihan 2, which provides for a P165.5 billion stimulus fund for pandemic response and recovery.

POGO to yield P17.5-B in revenues

Drilon said the Bayanihan 2 redefined the taxation of POGO and tightened the regulations in a bid to raise funds to augment the government's dwindling resources.

"The Bayanihan 2 will more than double the tax collection from POGO - from P7 billion estimated collection in 2019 to approximately P17.5 billion this year because of the reforms we have introduced in the measure," said Drilon citing the estimates by the Department of Finance.

The government wants to tap into the offshore gaming industry to close budget gaps in the P165-billion stimulus fund, he noted. The Bayanihan 2 can only fund up to P140 billion. Thus, the measure sets aside P25 billion as standby appropriation which can be funded when there are additional revenues or windfall collections, Drilon noted.

"All revenues from POGO will be used to fund the various types of assistance laid out in the Bayanihan 2 for all sectors affected by the pandemic," he added.

The Drilon amendment strictly mandates that the 5 percent franchise tax shall be on the gross bets or turnovers or the pre-determined minimum monthly revenues from gaming operations, whichever is higher, earned by offshore gaming licensees, including gaming operators, gaming agents, service providers and gaming support providers, according to Drilon

"With his amendment, the government can now impose the 5 percent franchise tax on the gross bets or turnovers which will yield more revenues for the government," he added.

The Bayanihan 2 also tightened the regulations on POGO to fix the loopholes in the current system, Drilon said.

Under the measure, the tax shall be computed on the peso equivalent of the foreign currency used, based on the prevailing official exchange rate at the time of payment, in order to prevent under-declaration of income.

Failure to follow the provision will be considered as a fraudulent act constituting underdeclaration of taxable receipts or income, and shall be subject to interests, fines and penalties under the National Internal Revenue Code of the Philippines, Drilon added.

The measure orders the Bureau of Internal Revenue (BIR) to shut down POGOs which fail to pay the taxes due.

The minority leader said he hopes for the immediate enactment of the measure in order to provide the much-needed relief and assistance to low-income families, healthcare workers, small and medium enterprises, and the tourism and transportation sector, among others.

Bayanihan 2 clears Telco towers hurdle

The Drilon amendment also paves the way for faster construction of cell towers in the country which is often cited as having the most expensive, yet slowest, internet connection in Asia.

Drilon said the law contains a provision that he proposed which temporarily suspends most permits for the installation and operation of cell towers in the country within the next three years.

There are about 29 to 35 documentary requirements and permits before a single tower could be built in a subdivision, barangay or town, Drilon noted. These permits include consent of the neighbors, barangay resolution, certificate of non-coverage, zoning clearance, height clearance, radiation evaluation studies, building permit, a city or municipal resolution, occupancy permit, mayor's permit, memorandum of agreement with DENR-NIPAS, among others.

Telcos often cite the difficulty in getting clearances and permits to build cell sites and towers, which can take years to complete, he noted.

Drilon also proposed a provision against the issuance of any temporary restraining order, preliminary injunction against the construction of telecommunications infrastructure, including cell sites and cell towers by courts except for the Supreme Court.

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