Philippines gaming regulator PAGCOR has come under fire after awarding a Php26 billion (US$477 million) consultancy contract for auditing POGO tax payments to a company not properly licensed to do so.
Global ComRCI was awarded the contract in 2017 with a remit to track the revenues of licensed POGOs (Philippine Offshore Gaming Operators) and ensure they were paying the appropriate amount of tax. However, it has since emerged that Global ComRCI is not registered in the Philippines, did not supply correct documentation in its bid and engaged with a bank that is also unlicensed in the Philippines, Soleil Chartered Bank (SBC), to certify it met PAGCOR’s capital requirements.
The issue was raised by Senator Sherwin Gatchalian, chair of the Ways and Means Committee, during a hearing on Monday examining the pros and cons of the POGO industry. As reported by Rappler, previous hearings have highlighted the loss of Php9.1 billion in POGO taxes due to sizeable discrepancies in industry GGR figures between PAGCOR, the Bureau of Internal Revenues and the POGOs themselves.
“The third-party auditor is not credible, is not capable,” said Gatchalian at Monday’s hearing.
“The third-party auditor is not qualified, simple things like address and business permit they don’t have, so how do you expect us to believe what they’re supplying to us, in the form of information, is accurate?”
It was noted that Global ComRCI’s own tax payments are worth further study given it has so far been paid Php842 million in consultancy fees alone by PAGCOR but has reported earnings of only Php7 million in its financial statements.
Gatchalian also pressed PAGCOR on how effectively it was cracking down on POGOs found to be breaking the law. Brickhartz Technology Inc and MOA Cloudzone Corp are both still operational, despite allegations made by a Senator last year that they had been involved in some of the kidnappings that were plaguing the online industry at the time. While the case against MOA Cloudzone Corp was dismissed, PAGCOR is still investigating Brickhartz.
“Do you think this is effective regulation?” Gatchalian asked.
“There is no sense of urgency within PAGCOR in so far as dealing with crimes. None of the POGO operators, especially those involved in crimes, respect us because we’re slow and our punishment is [small].
“If you want to regulate this effectively, we need urgency. I don’t see that. I think you’re treating the criminals with leniency. You are not strict with them and you are getting revenues from them. Here we see the conflict of interest.”
Gatchalian is calling for POGOs to be banned, arguing they pose more risk than reward, however Philippines President Ferdinand R. Marcos Jr stated during a media briefing last Friday that it was unlicensed operators flouting local laws.
RelatedPosts
