EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES )
Second Regular Session 
)
SENATE
S.B. No. 2076
FLED
Ttr.JE
N£>EX
Introduced by SEN. IMEE R. MARCOS
AN ACT
TAXING PERSONS ENGAGED IN PHILIPPINE OFFSHORE GAMING 
OPERATIONS AMENDING SECTION 25, SECTION 27, SECTION 108 
AND ADDING A NEW SECTION 125-A OF THE NATIONAL 
INTERNAL REVENUE CODE OF 1997, AS AMENDED
EXPLANATORY NOTE
Article IV, Section 28 of the 1987 Constitution provides that, "the Congress shall 
evolve a progressive system of taxation."
The Congressional Policy and Budget Research Department (CPBRD) of the 
House of Representatives defined the '''Philippine Offshore Gaming Operators 
(POGOs)' as an entity that offers and participates in offshore gaming services by 
providing games to players, taking bets, and paying the winning players. On the other 
hand, the Philippine Amusement and Gaming Corporation (PAGCOR) defined "POGO 
Service Provider^' as corporations which are registered in the Philippines that provide 
support to the operations of licensed operators in various areas of operations.
As of 23 February 2021, PAGCOR granted a total of thirty-three (33) Authority 
to Resume Operations for POGOs following their cessation due to the pandemic. While 
the PAGCOR Primer on POGOs claims that POGOs increase revenues for the 
government and create jobs for both Filipinos and foreigners, various questions 
regarding the implication and treatment of their taxes to the Philippine economy 
continue to proliferate.
As of today, the latest issuance of the Bureau of Internal Revenue (BIR) with 
regard to the issue still dates back to the year 2017 (BIR Revenue Memorandum 
Circular No. 102-2017) which was issued to clarify the taxability of POGOs and other 
gaming components. BIR Commissioner Cesar Dulay said that POGO licensees or 
operators are not being assessed nor paying income tax and other taxes because the 
BIR's RMC 102-2017 clearly states that in lieu of such taxes, they are only subject to 
the franchise tax. Further, he stated that, "Only POGO service providers are subject


to the regular taxes, such as income and VAT. However, both POGO operators and 
service providers whose employees earn compensation income need to withhold and 
remit the taxes due FROM them."
Thus, this bill seeks to establish a definitive law which shall settle the so-called 
"lost potential tax revenued' and address questions with regard to the taxability of 
POGOs and POGO employees/ workers by amending the National Internal Revenue 
Code (NIRC).
Therefore, the immediate passage of this biil is earnestly sought.
IMEE R. MARCOS


EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES )
Second Regular Session 
)
SENATE
S.B. No. 2076
FILED
DATC
TtME
Introduced by SEN. IMEE R. MARCOS
AN ACT
TAXING PERSONS ENGAGED IN PHILIPPINE OFFSHORE GAMING 
OPERATIONS AMENDING SECTION 25, SECTION 27, SECTION 108 
AND ADDING A NEW SECTION 125-A OF THE NATIONAL 
INTERNAL REVENUE CODE OF 1997, AS AMENDED
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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SECTION. 1. Section 25 of the National Internal Revenue Code of 1997, as
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amended, is hereby amended to add letter (G) to read as follows;
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"SEC. 25. Tax on Nonresident Alien Individual. -
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(A) XXX
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(B) XXX
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(C) XXX
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(D) XXX
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(E) XXX
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(F) XXX
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(G) ALIEN INDIVIDUAL EMPLOYED BY AN OFFSHORE GAMING
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LICENSEE. - AN ALIEN INDIVIDUAL REGARDLESS OF RESIDENCY AND
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WHO IS EMPLOYED AND ASSIGNED IN THE PHILIPPINES,
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REGARDLESS OF TERM AND CLASS OF WORKING OR EMPLOYMENT
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PERMIT OR VISA, BY AN OFFSHORE GAMING LICENSEE OR ITS
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SERVICE PROVIDER AS DEFINED IN SECTION 125-A AND SECTION 27
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(F) OF THIS CODE, SHALL PAY A FINAL WITHHOLDING TAX OF
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TWENTY-FIVE PERCENT (25%) ON THEIR GROSS INCOME AS
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COMPUTED IN THE SUCCEEDING PARAGRAPH.
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IN COMPUTING THE TAX PROVIDED IN THIS SECTION, SIX 
HUNDRED THOUSAND PESOS (P600,000.00) SHALL BE THE PRESUMED 
MINIMUM GROSS ANNUAL INCOME WHICH SHALL INCLUDE BASIC 
SALARY WAGES, ANNUITIES, COMPENSATION, REMUNERATION AND 
OTHER EMOLUMENTS, SUCH AS HONORARIA AND ALLOWANCES 
RECEIVED FROM SUCH SERVICE PROVIDER OR OFFSHORE GAMING 
LICENSEE.
THE TAX IMPOSED HEREIN MUST BE WITHHELD BY THE 
SERVICE PROVIDER OR OFFSHORE GAMING LICENSEE AND SHALL BE 
REMITTED QUARTERLY IN ADVANCE WITHIN TEN (10) DAYS OF THE 
FOLLOWING MONTH OF THE INITIAL COMPENSATION PAYMENT AND 
ON THE 30th DAY OF THE THIRD MONTH OF THE SUCCEEDING 
QUARTERS TO THE BUREAU OF INTERNAL REVENUE (BIR), BUT THE 
EXCESS OF THE AMOUNT OF TAX SO WITHHELD OR SO REMITTED IN 
ADVANCE OVER THE TAX DUE UNDER THIS SECTION SHALL BE 
REFUNDED TO THE TAXPAYER OR THE WITHHOLDING ENTITY OR 
TREATED AS A TAX CREDIT, WHICHEVER MAY BE APPLICABLE, 
SUBJECT TO THE PROVISIONS OF SECTION 204: PROVIDED, THAT IF 
THE INCOME TAX COLLECTED FROM THE WITHHOLDING ENTITY OR 
TAXPAYER IS LESS THAN THE TAX DUE UNDER THIS SECTION, THE 
DIFFERENCE SHALL BE PAID IN ACCORDANCE WITH THE PROVISIONS 
OF SECTION 56 OF THIS CODE: PROVIDED, FURTHER, THAT THE 
TAXPAYER OR WITHHOLDING ENTITY MAY AVAIL OF THE RECOURSES 
PROVIDED IN TITLE VIII, CHAPTER III OF THIS CODE, BY REPUBLIC 
ACT NO. 11032 OR THE EASE OF DOING BUSINESS LAW, AND OTHER 
APPLICABLE LEGAL REMEDIES AND RECOURSES.
GOVERNMENT AGENCIES AND INSTRUMENTALITIES 
COLLECTING APPLICABLE MANDATORY CONTRIBUTIONS, SUCH AS 
THE PHILIPPINE HEALTH INSURANCE CORPORATION (PHIC), THE 
SOCIAL SECURITY SYSTEM (SSS), AND THE HOME DEVELOPMENT 
MUTUAL FUND (HDMF), MAY USE THE BASIC SALARY PORTION OF THE 
MINIMUM GROSS ANNUAL INCOME PROVIDED HEREIN AS THE BASE 
FOR COMPUTING APPLICABLE CONTRIBUTIONS, AND MAY 
IMPLEMENT A REFUND SYSTEM SIMILAR TO SECTION 204 OF THIS 
CODE.
FOR THE EFFICIENT ASSESSMENT, VERIFICATION, AND 
ADMINISTRATION OF TAXES IMPOSED IN THIS SECTION, THE 
BUREAU OF IMMIGRATION, THE DEPARTMENT OF LABOR AND 
EMPLOYMENT, AND THE BUREAU OF INTERNAL REVENUE SHALL ISSUE 
JOINT AND CONSOLIDATED RULES AND REGULATIONS FOR THE 
IMPLEMENTATION OF FREE AND EFFICIENT EXCHANGE OF


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INFORMATION AMONG THE SAID AGENCIES IN RELATION TO THE
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PROPER PAYMENT OF TAXES BY PERSONS COVERED UNDER THIS
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SECTION: PROVIDEDf THAT THE MECHANISMS FOR FILING,
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WITHHOLDING OF TAXES, AND CLAIMING OF REFUNDS PROVIDED
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HEREIN SHALL ALSO APPLY TO ALIEN INDIVIDUALS EMPLOYED BY AN
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OFFSHORE GAMING LICENSEE WHO ARE WORKING UNDER
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PROVISIONAL WORKING PERMITS, SPECIAL WORKING PERMITS,
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ALIEN EMPLOYMENT PERMITS, OR SIMILAR ARRANGEMENTS.
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THE FOREGOING SHALL NOT PRECLUDE THE COMMISSIONER OF
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INTERNAL REVENUE FROM ISSUING SUCH RULES AND REGULATIONS
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AS MAY BE ALLOWED BY THE NATIONAL INTERNAL REVENUE CODE
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AND OTHER LAWS, RULES, AND REGULATIONS IN ACCORDANCE WITH
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THIS SECTION.
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ANY INCOME EARNED FROM ALL OTHER SOURCES WITHIN THE
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PHILIPPINES BY THE ALIEN EMPLOYEE REFERRED TO UNDER THIS
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SUBSECTION SHALL BE SUBJECT TO THE PERTINENT INCOME TAX,
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IMPOSED UNDER THIS CODE."
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SEC. 2. Section 27 of the National Internal Revenue Code of 1997, as amended,
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is hereby amended to add letter (F) to read as follows:
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"SEC. 27. Rates of Income Tax on Domestic Corporations. -
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(A) XXX
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(B) XXX
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(C) XXX
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(D) XXX
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(E) XXX
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(F) ACCREDITED SERVICE PROVIDERS TO OFFSHORE GAMING
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LICENSEES. - UNLESS OTHERWISE PROVIDED IN THIS CODE,
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ACCREDITED SERVICE PROVIDERS TO OFFSHORE GAMING LICENSEES
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SHALL NOT BE SUBJECT TO THE GAMING TAX IMPOSED BY SECTION
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125-A BUT SHALL PAY SUCH RATE OF TAX AS IMPOSED IN SECTION
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27(A) OF THIS CODE, AND SHALL BE SUBJECT TO ALL OTHER
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APPLICABLE LOCAL AND NATIONAL TAXES.
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FOR PURPOSES OF THIS SECTION, AN ACCREDITED SERVICE
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PROVIDER TO AN OFFSHORE GAMING LICENSEE ("SERVICE
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PROVIDER") SHALL BE A CORPORATION THAT IS DULY CREATED OR
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ORGANIZED IN THE PHILIPPINES OR UNDER ITS LAWS AND DULY
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AUTHORIZED BY THE PAGCOR OR ANY ECONOMIC ZONE TO PROVIDE


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ANCILLARY SERVICES TO AN OFFSHORE GAMING LICENSEE AS
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DEFINED BY SECTION 125-A OF THIS CODE OR TO ANY GAMING
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LICENSEE OR OPERATOR WITH LICENSES FROM OTHER
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JURISDICTIONS. SUCH ANCILLARY SERVICES MAY INCLUDE, BUT
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SHALL NOT BE LIMITED TO, CUSTOMER AND TECHNICAL RELATIONS
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AND SUPPORT INFORMATION TECHNOLOGY, GAMING SOFTWARE,
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DATA PROVISION, PAYMENT SOLUTIONS, AND LIVE STUDIO AND
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STREAMING SERVICES.
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SEC. 3. Section 108 of the National Internal Revenue Code of 1997, as amended,
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is hereby amended to add item no. (9) to read as follows:
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"Sec. 108. Value-added Tax on Sale of Services and Use or Lease of Properties.
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(A) XXX
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(B) Transactions Subject to Zero Percent (0%) Rate. - The following services
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performed in the Philippines by VAT-registered persons shall be subject to zero
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percent (0%) rate:
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(l)xxx;
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(2) xxx;
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(3) xxx;
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(4) xxx;
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(5)xxx;
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(6) xxx;
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(7)xxx;
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(8) xxx;
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(9) SERVICES 
RENDERED 
BY 
ACCREDITED 
SERVICE
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PROVIDERS, AS DEFINED UNDER SECTION 27(F) OF THIS CODE,
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TO OFFSHORE GAMING LICENSEES.
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SEC. 4. A new Section designated as Section 125-A of the National Internal
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Revenue Code 12 of 1997, as amended, is hereby amended to read as follows:
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"SEC. . 125-A. GAMING TAX ON SERVICES RENDERED BY OFFSHORE
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GAMING LICENSEES. - ANY PROVISION OF EXISTING LAWS, RULES OR
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REGULATIONS TO THE CONTRARY NOTWITHSTANDING, THERE SHALL
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BE LEVIED, ASSESSED AND COLLECTED A GAMING TAX EQUIVALENT
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TO FIVE PERCENT (5%) ON THE GROSS REVENUE OR RECEIPTS


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DERIVED FROM GAMING OPERATIONS AND SIMILAR RELATED 
ACTIVITIES OF ALL OFFSHORE GAMING LICENSEES IN LIEU OF ALL 
KINDS OF TAXES, INCLUDING FRANCHISE TAXES, LEVIES, FEES OR 
ASSESSMENTS OF ANY KIND, NATURE OR DESCRIPTION EXCEPT FOR 
REGULATORY FEES THAT MAY BE IMPOSED BY THE PHILIPPINE 
AMUSEMENT AND GAMING CORPORATION (PAGCOR) AND THE 
SPECIAL ECONOMIC ZONES. THIS INCOME IS THEREFORE EXEMPT 
FROM ANY KIND OF TAX, INCOME OR OTHERWISE, AS WELL AS FEES, 
CHARGES OR LEVIES OF WHATEVER NATURE, WHETHER NATIONAL OR 
LOCAL: PROVIDED, THAT THE PAGCOR SHALL COLLECT SAID AMOUNT 
AND DIRECTLY REMIT TO THE BUREAU OF INTERNAL REVENUE: 
PROVIDED, FURTHER, THAT IN THE CASE OF OFFSHORE GAMING 
LICENSEES LOCATED WITHIN A SPECIAL ECONOMIC ZONE, SAID 
AMOUNT SHALL BE COLLECTED BY THE CONCERNED SPECIAL 
ECONOMIC ZONE AUTHORITY AND SHALL BE DIRECTLY REMITTED TO 
THE BUREAU OF INTERNAL REVENUE: PROVIDED, FURTHER, THAT 
PAGCOR OR A SPECIAL ECONOMIC ZONE MAY IMPOSE REGULATORY 
FEES ON OFFSHORE GAMING LICENSEES WHICH SHALL NOT 
CUMULATIVELY EXCEED TWO PERCENT (2%) OF THE GROSS REVENUE 
OR RECEIPTS DERIVED FROM GAMING OPERATIONS AND SIMILAR 
RELATED ACTIVITIES OF ALL OFFSHORE GAMING LICENSEES OR A 
PRE-DETERMINED MINIMUM GUARANTEED FEE, WHICHEVER IS 
HIGHER: PROVIDED, FURTHER, THAT OFFSHORE GAMING LICENSEES 
WITHIN SPECIAL ECONOMIC ZONES SHALL PAY AT THEIR EXISTING 
RATE OF TAX OR THAT WHICH IS PROVIDED HEREIN, WHICHEVER IS 
HIGHER: PROVIDED, FURTHERMORE, THAT FOR PURPOSES OF THIS 
SECTION, GROSS REVENUE OR RECEIPTS SHALL MEAN GROSS 
WAGERS LESS PAYOUTS: PROVIDED, FINALL Y, THAT THE TAKING OF 
WAGERS MADE IN THE PHILIPPINES SHALL RESULT IN THE 
REVOCATION OF THE LICENSE OF THE OFFSHORE GAMING LICENSEE.
AN OFFSHORE GAMING LICENSEE SHALL REFER TO THE 
OFFSHORE GAMING OPERATOR, WHETHER ORGANIZED AND 
REGISTERED ABROAD OR IN THE PHILIPPINES DULY LICENSED AND 
AUTHORIZED, THROUGH A GAMING LICENSE, BY PAGCOR OR ANY 
SPECIAL ECONOMIC ZONE AUTHORITY OR TOURISM ZONE 
AUTHORITY TO CONDUCT GAMING OPERATIONS INCLUDING THE 
ACCEPTANCE OF BETS FROM OFFSHORE CUSTOMERS.
FOR PURPOSES OF THIS SECTION, AN OFFSHORE GAMING 
LICENSEE (OGL) SHALL BE CONSIDERED ENGAGED IN DOING 
BUSINESS IN THE PHILIPPINES. AN OGL-GAMING AGENT SHALL


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REFER TO THE REPRESENTATIVE IN THE PHILIPPINES OF AN
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OFFSHORE-BASED OPERATOR WHO SHALL ACT AS A RESIDENT AGENT
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FOR THE MERE PURPOSE OF RECEIVING SUMMONS, NOTICES AND
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OTHER LEGAL PROCESSES FOR THE OGL AND TO COMPLY WITH
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DISCLOSURE REQUIREMENTS OF THE SECURITIES AND EXCHANGE
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COMMISSION (SEC). THE OGL-GAMING AGENT SHALL NOT BE
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INVOLVED WITH THE BUSINESS OPERATIONS OF THE OFFSHORE
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GAMING LICENSEE AND SHALL DERIVE NO INCOME THEREFROM."
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SEC. 5. Implementing Rules and Regulations. - Within ninety (90) days after the
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effectivity of this Act, the Secretary of Finance shall, upon the recommendation of the
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Commissioner of Internal Revenue, promulgate the necessary rules and regulations
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for its implementation.
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SEC. 6. Separability Clause. - If, for any reason or reasons) any part or provision
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of this Act shall be declared as unconstitutional or invalid, the other parts or provisions
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hereof which are not affected thereby shall continue to be in full force and effect.
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SEC. 7. Repealing Clause. - All provisions of existing laws, orders, rules and
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regulations or parts thereof, including Republic Act No. 9487 and Republic Act No,
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11494, which are contrary to 19 or inconsistent with this Act are hereby repealed,
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amended or modified accordingly.
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SEC. 8. Effectivity. — This Act shall take effect effect fifteen (15) days after its
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publication in the Official Gazette or in a newspaper of general circulation in the
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Philippines.
Approved,