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House OKs tax on ‘sabong’ e-bets, eyes P1.25-billion take (SABONGONLINEGAME)

House OKs tax on ‘sabong’ e-bets, eyes P1.25-billion take
Author Jovee Marie de la Cruz
Date DECEMBER 16 2020
THE House of Representatives on Tuesday approved on third and final reading the bill imposing new taxes on offsite betting on locally-licensed games, including electronic betting on cockfighting, locally known as “sabong.” Voting 215 affirmative, 1 negative with no abstention, lawmakers passed the House Bill 8065, which taxes an untaxed and non-essential activity, and will boost government revenues to fund Covid-19 response and recovery measures. House Ways and Means Committee Chairman Joey Sarte Salceda said the proposal is expected to raise at least P1.25 billion on its first full year of implementation, which would multiply the current BIR collection of P13.7 million from cockpits by more than 90 times. “Simply put, it’s an untaxed activity where taxes will not harm the economy. The conclusion is obvious on the revenue aspect. Let’s make better use of the industry, while regulating it,” Salceda said. “The bill taxes an existing industry that is not yet being taxed, without causing any economic harm, as wagering is a demand inelastic non-essential,” he added. The bill will now be transmitted to the Senate for its own deliberations. According to Salceda 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 P13.7 million in 2019,” Salceda said. Under the bill, the tax shall be 5 percent of gross revenues derived from Offsite Betting Activities on Locally Licensed Games, and shall not be in lieu of taxes required by the 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 also 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. To establish transparency and accountability in these activities, the proposal also empowers the BIR to verify tax assessments. The Committee Report also empowers the Games and Amusements Board (GAB) to issue rules and regulations for the fair conduct of offsite betting on locally licensed cockfights and derbies, including devices required of gaming operators, agents, and other related parties. 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. According to Games and Amusements Board Chairman Abraham Mitra, the industry is worth about P50 billion annually. LGUs are yet unable to collect revenues effectively from the industry. The Games and Amusements Board, the Bureau of Internal Revenue and the Department of Finance fully support the proposal.

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