Varying ecozone fees imposed on POGOs flagged by fiscal body
THE Fiscal Incentives Review Board (FIRB) said investment promotion agencies (IPAs) need to harmonize the fees for locators from the Philippine Offshore Gaming Operator (POGO) industry, after finding wide disparities in the charges collected by various economic zones.
Finance Secretary and Fiscal Incentives Review Board (FIRB) Chairman Carlos G. Dominguez III ordered the FIRB Secretariat to rationalize fee structures across the industry, the Department of Finance (DoF) said in a statement.
“Clearly, there is no uniformity in the fees charged by the IPAs to their registered POGO companies when in fact, they all fall under the same type of project,” according to Assistant Secretary and FIRB Secretariat Head Juvy C. Danofrata.
According to IPA reports to the FIRB Secretariat, the Cagayan Economic Zone Authority (CEZA) charges POGOs a $200,000 application and processing fee and $500,000 for a master license for interactive gaming and land-based casino operations.
Other IPAs charge application, processing, and renewal fees for e-casino and sports betting of between $10,000 and $25,000.
For POGO service providers including those offering business process outsourcing (BPO) and information technology (IT) support services, the application, processing, and renewal fees range between $10,000 and $50,000.
According to Secretariat data, CEZA has 32 registered POGO licensees and service providers. Three service providers are registered with the Authority of the Freeport Area of Bataan (AFAB), five with Clark Development Corp. (CDC), and one with the Subic Bay Metropolitan Authority (SBMA).
Ms. Danofrata added, “The FIRB Secretariat has been instructed by Secretary and Board chairman Dominguez to look into the inconsistent charges set by the IPAs, which most likely does not only apply to the POGOs registered under them, with the end view of streamlining the collection and use of such fees charged investors or locators.”
Ms. Danofrata cited Section 297 (A) of the National Internal Revenue Code (NIRC) of 1997, as amended by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which grants the authority to the FIRB to exercise policy-making and oversight functions on the administration and grant of tax incentives. Its authority in this case derives from the IPA fees forming part of the incentives regime.
CREATE allows the FIRB can review and rationalize fees imposed by IPAs on their registered locators, she added. — Tobias Jared Tomas
