BIR to comply with SC TRO against collecting POGO franchise tax

PHILSTAR

THE Bureau of Internal Revenue (BIR) will comply with the Supreme Court’s (SC) ruling barring it from collecting the 5% franchise tax on Philippine Offshore Gaming Operators (POGOs).

“We will respect the TRO (temporary restraining order),” said Finance Secretary Carlos G. Dominguez III in a Viber message to reporters on Wednesday.

The Philippine Star reported Wednesday that the Supreme Court issued a TRO preventing the Department of Finance (DoF) and the BIR from collecting the franchise tax.

The order effectively blocks the government from implementing Section 11 of Bayanihan II, as well as the BIR’s Revenue Regulation 30-2020 and memorandum circulars 102-17 and 078-18, according to the report.

The ruling responds to a petition filed by 14 licensed POGOs that questioned the franchise tax, it added.

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Republic Act 11519 or the Bayanihan to Recover as One Act (Bayanihan II) changed the basis of the five percent franchise tax to gross bets amid alleged cheating when computing their net winnings.

The DoF has also asked the Department of Justice (DoJ) and the office of the Solicitor General (SolGen) to comment on the TRO.

In a text message on Wednesday, BIR Commissioner Caesar R. Dulay said the “DoF referred the case to DoJ/SolGen.”

The Supreme Court had not released a statement on the TRO at deadline time.

Several POGOs exited the country last year, citing overly stringent tax rules. — Beatrice M. Laforga

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