PAGCOR admits remitting cash dividends

Posted at 06/27/2014 4:12 PM | Updated as of 06/27/2014 4:12 PM

MANILA - The Philippine Amusement and Gaming Corporation (PAGCOR) on Friday thumbed down the opposition of Bayan Muna party-list Rep. Neri Colmenares to the reappointment of the board, saying it has been a "responsible corporate citizen" under its current management.

In a statement, the PAGCOR said it has started remitting cash dividends to the National Treasury and begun paying Corporate Income Tax and Fringe Benefits Tax to the Bureau of Internal Revenue (BIR) only during the present administration.

The state-owned gaming firm said that of the P5.14 billion worth of unremitted cash dividends of the previous PAGCOR administration that it owes to the National Treasury, it has already paid P2.44 billion. The current administration will settle the remaining P2.71 billion by next year, it said.

It has also settled P856.98 million in back taxes (P657.18 million in Corporate Income Tax and P199.80 million in Fringe Benefits Taxes) incurred by the previous administration from 2004 to June 2010.

"It should also be noted that our administration accelerated the payment for loans made by the past PAGCOR management for the acquisition of various properties," it said. The loans amounted to P1.65 billion as of June 30, 2010.

"It is also worth noting that due to the judicious management of funds of the incumbent PAGCOR administration, the state-owned gaming firm was able to give a P5 BILLION funding to the Department of Education (DepEd) for the construction of thousands of classrooms in public schools nationwide," it added.

The PAGCOR, meanwhile, explained why it reduced license fees from 15-25 percent to 5-10 percent. It noted that the BIR issued Revenue Memorandum Circular No. 33-2013 on April 17 last year, which clarified that proponents do not need to pay 5 percent franchise tax but are liable for income tax.

"Following the contracts entered into by the previous PAGCOR Board for the license fees to be in lieu of all taxes, the license fees were adjusted by 10% to range from 5% to 15% instead of the original range of 15% to 25% so that the proponents can give the 10% adjustment directly to the BIR as income tax. The proponents will still pay a total of 15% to 25% of their gaming revenues to the government except that the 10% will be directly remitted to the BIR instead of passing through PAGCOR... Thus, at the very least, this formula preserves the government's financial benefits," it said.

Meanwhile, the gaming firm defended its intelligence operations, saying these "form an integral part of its gaming operations and give assurance to its gaming clientele that the integrity of its gaming activities is maintained and protected."

"The liquidation of cash advances being made for intelligence operations have always been done by the special disbursing officers in accordance with COA Circular 2003-002 which only required the submission of certifications of fund utilization."

The COA, however, recently requested the submission of additional documentary requirements beyond those required by COA Circular 2003-002. PAGCOR said it has complied with these requirements.

"We are also awaiting the guidelines being prepared jointly by GCG, DBM and the COA to cover intelligence and confidential funds of government entities. The issuance of these guidelines will further ensure judicious use of government funds," it said.

"We also wish to point out that for 2014, the projected disbursement for intelligence operations would actually fall below the 1999 LEVELS in absolute amounts and much lower by 46 percent compared to the highest annual intelligence expense incurred by the previous PAGCOR administration. Also, we are still looking for ways on how to reduce PAGCOR's intelligence expenses," it added.