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PAGCOR Ordered to Pay PHP117M in Deficiency Income Tax by CTA

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PAGCOR faces a significant financial obligation.

The Court of Tax Appeals orders PAGCOR to pay PHP117 million in deficiency income tax.

A landmark ruling could redefine fiscal responsibilities for gaming entities in the Philippines.

Delve into the details of this pivotal tax ruling against PAGCOR.

Court’s Decision on PAGCOR’s Tax Liability

The Philippines’ Court of Tax Appeals (CTA) has directed PAGCOR, the gaming regulatory body, to pay a substantial deficiency income tax of PHP117 million (US$2.1 million) for 2005 and 2006.

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Breakdown of Deficiency Income Tax Payments

The court’s ruling, issued by Associate Justice Lanee S. Cui-David, outlines specific payments: PHP13.11 million (US$235,500) for 2005 and PHP104.9 million (US$1.88 million) for 2006.

Inclusion of Delinquency Interest

In addition to the basic tax payments, PAGCOR must also settle delinquency interest. This requirement stems from a 2017 Supreme Court decision that remanded the case to the CTA.

Background of the Legal Issue

The tax issue originated in 2008 when the Bureau of Internal Revenue (BIR) assessed PAGCOR for PHP5.92 billion (US$106.35 million). This assessment included income tax, value-added tax, and fringe benefit tax (FBT) for the two-year period.

2017 Supreme Court Ruling on PAGCOR

The Supreme Court’s 2017 ruling partially sided with PAGCOR. It annulled the BIR’s assessment related to gaming operations but clarified tax obligations on revenue from related services.

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Clarification on Tax Exemptions

The Supreme Court distinguished that while the Value Added Tax Reform Law (Republic Act 9337) did not revoke PAGCOR’s tax privileges under the PAGCOR Franchise Law of 1983 (Presidential Decree 1869), it did remove the exemption from corporate income tax on non-gaming revenues. The court also noted that FBT is not exempt under these privileges.

Conclusion: PAGCOR’s Fiscal Challenge Ahead

This ruling poses a significant financial challenge for PAGCOR and sets a precedent for the tax treatment of gaming entities in the Philippines. As PAGCOR prepares to comply with the CTA’s mandate, this case highlights the complexities of tax laws and their impact on government-owned and controlled corporations in the gaming sector.

Jerome, a valuable addition to the Gamingo.News team, brings with him extensive journalistic experience in the iGaming sector. His interest in the industry was sparked during his college years when he participated in local poker tournaments, eventually leading to his exposure to the burgeoning world of online poker and casino rooms. Jerome now utilizes his accumulated knowledge to fuel his passion for journalism, providing the team with the latest online scoops.

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Asia

188Bet Embracing the Philippines’ Gaming Landscape

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188Bet’s Return to Philippines: A Vote of Confidence in Regulatory Environment

Amidst shifting tides in the global gambling industry, the return of 188Bet to the Philippines emerges as a symbol of trust and optimism in the regulatory landscape. Following its relocation during the Duterte administration, 188Bet’s decision to establish roots once more in the Philippines underscores the nation’s growing allure as a hub for gaming enterprises.

The Philippine Amusement and Gaming Corporation (PAGCOR) warmly welcomed 188Bet’s relocation, hailing it as a significant endorsement of the country’s regulatory framework. This pivotal move not only marks a strategic business decision for 188Bet but also reflects broader industry trends and governmental initiatives aimed at fostering a conducive environment for gaming investments.

Chairman and CEO of PAGCOR, Alejandro H. Tengco, lauded 188Bet’s return as a “huge vote of confidence,” emphasising the nation’s commitment to fairness and transparency in its regulatory practices. With the establishment of a new Philippine-based entity, BestCommerce Corporation, under PAGCOR’s licensure and supervision, 188Bet is poised to reenter the market with renewed vigor and compliance.

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188Bet’s resurgence aligns seamlessly with PAGCOR’s overarching vision to catalyse sustained growth within the gaming sector. Chairman Tengco’s projections of annual Integrated Resort (IR) inaugurations and strategic expansions across key locales paint a promising picture of the industry’s trajectory in the coming years. Additionally, PAGCOR’s strategic pivot toward regulatory oversight underscores its dedication to fostering a competitive yet equitable gaming landscape.

In this article, we delve into the intricacies of 188Bet’s return to the Philippines, dissecting its implications for the gaming industry and analysing the broader regulatory framework championed by PAGCOR. Through an exploration of key developments and future prospects, we uncover the dynamic interplay between regulatory policies, industry dynamics, and investor sentiment in shaping the Philippines’ gaming landscape.

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