The House Ways and Means Committee has approved in principle House Bill No. 7919 which would impose new taxes on offsite betting on locally-licensed games, including electronic betting on cockfighting, locally known as “sabong.”
Under the proposal of Albay Rep. Joey Salceda, chairman of Ways and Means committee, the tax shall be 5% of gross revenues derived from Offsite Betting Activities on Locally Licensed Games, and shall not be in lieu of taxes required by the local government units (LGUs) and regulatory fees and charges imposed by government agencies.
LGUs will still have full regulatory and revenue collecting powers over in-premise games and betting.
“The operations of online betting on sabong are authorized by local ordinances. Because of the digital shift, there are now electronic betting operations on such games. But the electronic aspect of it is a gray area, even though the airwaves is national property. Because of this ambiguity, we are unable to levy national taxes on these activities. By clarifying this gray area in my proposal, we hope to raise multiples more in revenues than the BIR collection from cockpits of P13.7M in 2019,” Salceda said.
Salceda’s bill empowers the Bureau of Internal Revenue (BIR) to accredit and inspect totalizators and other gambling devices used to verify tax assessments, while allowing the LGUs to maintain full authority to license the games under their jurisdiction, imposing whatever local taxes they want to.
It also requires relevant gaming operators to specify “Offsite Betting Activities on Locally Licensed Games” in disclosures and documentations required by the BIR and other regulatory government agencies and instrumentalities. This requirement will help ensure that the government can monitor the activities of such operators.
“While the government seeks new revenue streams to fund its COVID-19 priorities, this bill responds to this government need by imposing new national government taxes on activities that already exist and will undoubtedly continue to exist as digital technologies grow more sophisticated, but are not being imposed such taxes. Unlike other tax proposals which may have adverse socioeconomic impacts and may dampen economic growth and recovery, this proposed regime will not impose taxes on any goods and services essential to the Filipino people,” Salceda said.
According to Games and Amusement Board (GAB) Chair Abraham Mitra, the industry is worth about P50 billion pesos annually. LGUs are yet unable to collect revenues effectively from the industry.
“Once a national internal revenue tax is imposed on the industry, on top of local taxes, LGUs will also have a share in the collections, consistent with the Mandanas ruling. So, everyone wins.” Salceda said.
Salceda’s committee is set to identify a regulating authority with regard to offsite or online betting activities, to be added in the proposal in order to properly implement the measure, which will be further discussed in the Committee’s hearings. Taxes on winnings are also being contemplated.