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Politics

Philippines to tax foreign online casino workers amid Chinese backlash

Finance department expects at least $418 million in revenue

The administration of Philippine President Rodrigo Duterte, which has secured billions of dollars worth of economic deals from China, has been criticized by lawmakers and labor groups over its loose immigration policy for Chinese workers.   © Reuters

MANILA -- The Philippines on Monday said it was fast-tracking a process to tax foreign online casino workers in the country, as President Rodrigo Duterte's government moves to raise revenues and fend off a local backlash against the rising number of Chinese workers.

The Department of Finance said it aims to collect at least 22 billion pesos ($418 million) annually from more than 100,000 online gaming industry staff, dominated by Chinese. Currently, many of the workers are believed to be evading income tax payments, partly due to inconsistent government records on their actual count.

The plan comes as the Duterte administration, which has secured billions of dollars worth of economic deals from China, has been criticized by lawmakers and labor groups over its loose immigration policy for Chinese workers.

In February, an interagency task force was formed to determine the actual number of foreign online casino workers in the country, as the rise of undocumented workers clouded the official count.

"We have to get a clear picture here," Finance Secretary Carlos Dominguez said in a statement on Monday. "If we do not have that, how can the BIR [Bureau of Internal Revenue] do its job, which is to collect taxes from everybody so that we are being fair to all Filipinos who are paying their taxes?"

The Philippines has seen an influx of Chinese tourists and workers in the country since Duterte came to power in 2016, when the then-newly elected president embraced Beijing as an economic partner rather than a maritime foe in the South China Sea. That year, his government began issuing online gaming licenses, which were secured by Chinese-linked companies.

Data from the Bureau of Immigration showed that in 2018 alone, over 200,000 Chinese workers applied for work permits, 90% of which were for online casino-related jobs, bureau Commissioner Jaime Morente told a Senate inquiry last month. The number excludes suspected illegal aliens, including the more than 200 Chinese mainland citizens who were arrested during a raid of an online gaming facility in February.

The finance department, citing a report, said an online casino worker earns an average of 78,000 pesos ($1,480) per month, which is subject to a 25% income tax. The amount is about five times the minimum monthly wage in Manila.

"We have to go after these guys because they are not paying taxes. Simple," Dominguez said in the statement. "We hope that everybody will be 100% cooperative here so that these guys can get their taxes collected."

The government is eager to ramp up tax collection to fund Duterte's infrastructure buildup. Last year, the government budget deficit stood at 3.2% of gross domestic product, breaking the 3% ceiling set by the government's economic team, the first time it did in nearly a decade.

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