The gaming sector in the Philippines (referred to as e-gaming) could contribute up to 20 billion Philippine pesos ($356.9 million) in franchise taxes to the country's Bureau of Internal Revenue (BIR) this year.
According to the Philippine Star, Assistant Finance Minister Carlo Adriano made the statement during a fundraising committee hearing at the Philippine Senate on Thursday.
As per the section on e-gaming licenses on the website of the Philippine Amusement and Gaming Corporation (Pagcor), license holders include online gaming platforms of licensed casinos, as well as bingo gaming operations.
Last month, Pagcor stated that e-gaming remains the fastest-growing sector in the industry, with revenues reaching 30.85 billion Philippine pesos for the quarter ending June 30.
Based on the report from Thursday's Senate hearing, Adriano noted that the BIR is expected to collect at least 15 billion Philippine pesos and up to 20 billion Philippine pesos from the 5% franchise tax on e-gaming franchise operators this year.
These figures represent a 12.8% and 50.4% increase from last year's e-gaming franchise tax revenue of 13.3 billion Philippine pesos, respectively.
From January to July this year, the e-gaming franchise tax has already collected 10.7 billion Philippine pesos.
In the Philippines, any gaming business (including e-gaming) is subject to a 5% franchise tax, which is paid directly to the BIR.
The franchise tax is distinct from other licensing and regulatory fees paid to Pagcor.
Senator Sherwin Gatchalian, chairman of the fundraising committee, stated that the revenue from e-gaming is sufficient to offset the revenue loss caused by the closure of Philippine Offshore Gaming Operators (POGO) businesses. Mr. Gatchalian has been a vocal critic of the social harms and criminal activities allegedly associated with some POGO operators.
The Philippine Star quoted Alejandro Tengco, chairman of Pagcor, acknowledging that as countries around the world legalize online gambling, physical casinos are also "adapting" to e-gaming "to protect their customer base," a factor that could impact the Philippine market.
"E-gaming is affecting physical casinos, which is why Integrated Resorts [IR] are also joining," Tengco said, using the industry term for large casino complexes and other leisure facilities.
