Pagcor Wins Appeal; P38M Notices of Charge Lifted by Commission on Audit

MANILA, Philippines (November 30, 2023) — THE Philippine Amusement and Gaming Corporation (Pagcor) has won its appeal to the Commission on Audit for the lifting of notices of charge (NCs) for alleged under collection of franchise tax and overpayment to two casino operators from 2013 to 2015 totaling P38.16 million.

Peter Tabingo, Malaya Business Insight, writes that in its en banc decision, the COA Commission Proper held that the notices of charge were improperly issued against the state gaming regulator.

“The NCs should not have been issued against PAGCOR. PAGCOR has no duty to collect taxes from which the NCs are issued resulting from under-appraisal, under-assessment, or under-collection,” the Commission pointed out.

The NCs were both issued on July 25, 2016 faulting Pagcor for failure to collect franchise taxes from Frontier Wish International Limited (FWIL) in the sum of P28.525 million and Palmgold International Limited for P9.635 million.

Both casinos were operating slot machine arcades, electronic gaming machines, and amusement and entertainment businesses in buildings located inside the Subic Bay Freeport Zone, hence they were under the jurisdiction of the Subic Bay Metropolitan Authority (SBMA).

Auditors said the amounts should have been deducted from the two casinos’ shares of the income but were instead paid to them.

Held liable in the NCs were Pagcor senior accounting officer Mirinisa Golosino, finance officers Tomas Marquez and Gerry Quinajon, branch managers Jose Tulio and Ricardo Lilwanag, and the two casino operators.

In considering Pagcor’s appeal, the COA CP invoked the Supreme Court ruling in the 2017 case of Ramiscal Jr. vs. COA which held that COA’s duties do not include the collection of taxes as this power and duty is vested in the Bureau of Internal Revenue (BIR).

In the same ruling, the High Court held that the COA may issue a notice of charge to the agency that has the authority or function to collect taxes such as the BIR or a local government unit.

Earlier, the COA also affirmed the lifting of notices of charge issued against Pagcor concerning P41.5 million in supposed uncollected franchise taxes from Frontier Wish (P21.15 million) and Gold Coast Leisure World Corp (20.35 million).

By: Peter Tabingo.

SOURCE: Malaya Business Insight.