The House Committee on Ways and Means has approved and endorsed for plenary debates and approval a measure seeking to impose taxes on offsite betting activities of locally licensed cockfights and derbies.
In less than one hour of virtual deliberations, the House panel decided to approve the substitute bill to House Bill No. 7919, principally authored by committee Chair Albay 2nd District Rep. Jose Maria Sarte Salceda, "subject to amendments and style."
It was Deputy Speaker and ABONO partylist Rep. Conrado Estrella III who moved for the approval of the substitute measure. Estrella’s motion was seconded by Manila Teachers partylist Rep. Virgilio Lacson.
The substitute measure provides that amusement taxes shall be collected from the proprietors, lessees, and operators of cockpits, including operators of online platforms for such cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, jai-alai, and racetracks.
“For offsite betting activities on local licensed cockfights and derbies, and other derivative activities, there shall be levied, assessed, and collected a tax equivalent to five percent based on gross receipts, which shall be directly remitted to the Bureau of Internal Revenue (BIR) and shall be in lieu of all other percentage taxes but shall not be in lieu of local government taxes and regulatory fees and charges applicable to such activities,” the bill provides.
Apart from the imposition of a five-percent tax on offsite betting based on gross receipts, the bill also calls for the collection of taxes amounting to 18 percent from cockpits.
"For as long as the bet theoretically is being made on a game that is in the Philippines, I think we will be able to collect the five percent,” Salceda said.
He explained that the measure is not seeking to regulate, but to generate revenues.
“This is pure revenue generation that accrues to national government for ownership of airwaves that is being used by offsite betting. Walang iba (Nothing more). It’s just parallel to the digital economy taxation,” Salceda said.
During the hearing, officials of the Department of Finance (DOF), the Bureau of Internal Revenue (BIR) and Games and Amusements Board expressed support to Salceda’s measure, which seeks to amend the National Internal Revenue Code of 1997, as amended.
“We are supportive of this measure. I understand the current compliance in terms of 18-percent based on previous hearing is low. This is a welcome development,” DOF Assistant Secretary Dakila Elteen Napao told the panel.
Larry Barcelo, Director II-Head Revenue Executive Assistant of the BIR Legal Service said they subscribed to the DOF’s position.
During the virtual hearing, GAB Chairman Abraham Mitra asked the panel to include a provision stating that the GAB is mandated to issue permits for international derbies.
“May I kindly request that it will be included in one of the provisions that in case the derby is an international derby participated by international participants, it is the GAB that issues the permit,” he said.
“Baka po kasi mag may online ng international derby then hindi po masasakop into at hindi po mata-tax,” he explained.
(Maybe, the international derby will be conducted online and this will not subjected to tax.)
Salceda cited the need for the House to pass the measure, considering its benefits and in view of the government’s need for revenue sources that do not dampen growth and instead impose taxes on non-essential activities.
“As a national internal revenue tax, the tax imposed by this bill will also generate revenues that will be shared with local government agencies, on top of the taxes that they themselves can impose, which this bill does not prevent them from doing,” he said.