The unpaid tax liabilities were incurred from 2004 until 2010

Pagcor settles tax dispute

2012-01-11
Reading time 1:44 min
(Philippines).- The Philippine Amusement and Gaming Corporation (Pagcor) has settled unpaid tax liabilities, incurred from 2004 until 2010incurred under the agency’s previous administration, amounting to almost us$13.3 million, as the government seeks to boost its overall tax take.

According to a statement issued by Pagcor, most of these unpaid tax liabilities were incurred when the agency was removed from the list of agencies that were exempted from paying corporate income tax.

The state-owned gaming firm contested the constitutionality of this ruling, asserting that under its charter it is exempted from paying income tax. However, the Supreme Court issued a ruling last year rendering as constitutional the removal of Pagcor from the list of corporate income tax-exempt entities.

“We talked to BIR (Bureau of Internal Revenue) Commissioner Kim Jacinto-Henares and informed her of our desire to voluntarily comply with Pagcor’s tax obligations by offering to settle 19 us$ in unpaid back taxes. This is our way of helping raise more funds for our government,” Pagcor Chairman and CEO Cristino Naguiat, Jr. said.

According to Naguiat, the BIR eventually agreed to accept the offer as partial settlement of the agency’s tax liabilities. “The amount is still subject to validation by BIR. There is still an ongoing audit investigation. We will not hesitate to pay the taxes due our government," he explained.

Pagcor is the third largest revenue-generating arm of the government next to the BIR and Bureau of Customs. From January to November 2011, the agency generated gross revenues of us$ 756.000, almost half of which was donated to social projects.

With boosting tax revenues a high priority for the government, PAGCOR said that the settlement would "support the national government’s tax collection efforts".

Tax revenue in the first half of 2011 reached us$ 15 bn, up 15% from the previous year, although this was marginally below the government's target.

Recent compliance campaigns have focussed heavily on self-employed professionals such as doctors, lawyers and accountants, where a problem has already been identified with under-reporting of income.

The BIR has previously pointed out that it now holds sufficient data available to check whether an individual’s lifestyle is out of line with taxes paid. It has been provided with the authority to access information from a wide range of public and private sources to check on a taxpayer’s income tax capacity.

Last year, the BIR was expected to raise some us$ 4.4bn from individual income tax, whereas, in 2012, its collection target will be almost us$ 5bn. Individual income tax represents over 20% of BIR’s annual revenue returns.

Related topics:
Leave your comment
Subscribe to our newsletter
Enter your email to receive the latest news
By entering your email address, you agree to Yogonet's Condiciones de uso and Privacy Policies. You understand Yogonet may use your address to send updates and marketing emails. Use the Unsubscribe link in those emails to opt out at any time.
Unsubscribe
EVENTS CALENDAR