Supreme Court of the Philippine on Tuesday suspended the collection of increased franchise taxes from Philippine Offshore Gaming Operators (POGOs) under the Bayanihan to Recover As One Act (Bayanihan 2), which would have raised billions in additional revenues for the government to address the pandemic.

Supreme Court magistrates voted 13-1 to issue a temporary restraining order preventing the Bureau of Internal Revenue and the Department of Finance from collecting 5% franchise tax on an increased tax base from POGOs, which are mostly Chinese-run.

Senate Minority Leader Franklin Drilon said in September that a provision in Bayanihan 2 imposed a 5% franchise tax on the total bets received by POGOs or from the pre-determined minimum monthly revenues from their operations, whichever is higher.

The increase in tax base meant raising revenue collection from POGOs from the P7 billion estimated collection in 2019 to around P17.5 billion (USD 364.1 million) in 2020.

The taxes were intended to help fund various government projects to address the pandemic, including the purchase of vaccines. But a majority of the justices saw the provision as a “rider,” according to the news outlet.

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