PAGCOR successfully appeals to COA for removal of notices of charge

December 1, 2023 Philippines Crime & Legal

The Commission on Audit (COA) has successfully heard an appeal from the Philippine Amusement and Gaming Corporation (Pagcor) on the withdrawal of notices of charge (NCs) pertaining to purported under- and overpayment of franchise taxes to two casino operators, totaling P38.16 million, between 2013 and 2015.

In its en banc decision, the COA Commission Proper determined that the charges against the state gambling regulator were made unlawfully. According to the Commission, Pagcor is not obligated to collect taxes, hence the NCs for under-appraisal, under-assessment, or under-collection were unwarranted.

In the NCs filed on July 25, 2016, Pagcor was accused of neglecting to collect franchise taxes from Palmgold International Limited and Frontier Wish International Limited (FWIL), totaling P9.635 million and P28.525 million, respectively. The Subic Bay Metropolitan Authority (SBMA) was in charge of both casinos, which were situated in the Subic Bay Freeport Zone.

Auditors said that instead of being sent to the casinos as part of their revenue sharing, the money ought to have been withheld. The COA CP found Pagcor’s branch managers, casino operators, chief accounting officer, and finance authorities liable in the NCs.

In support of its successful appeal, Pagcor highlighted a 2017 Supreme Court ruling emphasizing that the COA is not responsible for collecting taxes; rather, the Bureau of Internal Revenue (BIR) or local government organizations are. The ruling states that entities like the BIR or local government units that have the authority or responsibility to collect taxes may receive charge notices from the COA. The COA has already verified the dismissal of charges against other casino operators for allegedly unpaid franchise taxes totaling P41.5 million.