BIR slaps P2.23 billion tax evasion case vs POGO firm

The Bureau of Internal Revenue (BIR) in the Philippines has initiated a tax evasion case against Hongsheng Gaming Technology Inc., a firm that engaged in offshore gaming activities within the country. The investigation uncovered significant tax deficiencies amounting to P2.23 billion, resulting from Hongsheng's alleged failure to accurately declare their income, correctly determine their value-added tax (VAT) duties, and withhold the appropriate final withholding tax on payments made to their foreign employees.

These transgressions were observed across the fiscal years 2021 to 2023. The discrepancies between Hongsheng's reported earnings and the official records led to the determination of these substantial tax liabilities. Previously, Hongsheng was operating under the name Baofu compound in Bamban, Tarlac, where a raid was conducted by authorities due to suspicions of fraudulent cryptocurrency investment operations.

The firm later changed its business name to Zun Yuan Technology Inc., which Senate President Sherwin Gatchalian had previously labeled as a "fake company" due to the non-existence of the owners and their addresses. In a move to curb illicit activities and threats to national security, President Marcos signed a law banning all Philippine Offshore Gaming Operators.

The BIR's Commissioner Charlito Martin Mendoza emphasized the agency's commitment to safeguarding the interests of compliant taxpayers, asserting that no business should be permitted to operate in the Philippines, earn income, and evade the required taxes. He further stated that the BIR would pursue these cases relentlessly, following the evidence wherever it may lead.

This case is part of the BIR's ongoing "Run After Tax Evaders" program, which aims to combat tax evasion and other fraudulent schemes that not only undermine government revenues but also disadvantage compliant taxpayers.