THE chairman of the House committee on ways and means has proposed the need to tax local games like online sabong and similar legally operated electronic betting activities to help the government raise additional revenues for its coronavirus disease-19 (COVID-19) response.
Albay Rep. Joey Sarte Salceda filed House Bill (HB) 7919 to impose a tax regime on “Offsite Betting Activities on Locally Licensed Games.”
Salceda said his proposal shall exclude “games and activities specifically authorized by law to be performed by the government gaming authorities, such as the Philippine Amusement and Gaming Corporation (PAGCOR) and the Philippine Charity and Sweepstakes office (PCSO).”
Salceda said his proposed law will ensure that the government will still be able to collect taxes on activities where there is ambiguity as to regulatory purview.
“The already legal online betting on sabong, other local games should be taxed,” Salceda said, adding that that the tax proposal would make local games more transparent and accountable.
The House leader said the “local government will have full authority to license the games under their jurisdiction, and they will be able to impose whatever taxes they want to. But the national government will also be imposing these taxes, for the use of the airwaves which is national property.”
He said his bill is proposing a fiscal regime for betting activities to clarify the national government’s share of their revenues and to ensure that the government can look into their operations.
“The operations are already legal, by virtue of local ordinances, but the electronic aspect of it is a legal gray area. Because of the ambiguity, we are unable to levy national taxes on these activities, or look into their operations. My bill addresses that concern,” Salceda said.
The tax shall be 5% of gross revenues derives from Offsite Betting Activities on Locally Licensed Games as defined in this bill, and shall not be in lieu of taxes required by the local government units, and regulatory fees and charges imposed by government agencies.
This is consistent with the bill’s intention not to overstep the authority of the local government units, Salceda said.
To establish transparency and accountability in these activities, the bill also empowers the Bureau of Internal Revenue (BIR) to “to accredit and inspect totalizators and other gambling devices used in the collection, consolidation, and recording of wagers made in offsite betting activities on locally licensed games.”
Salceda said this will allow the BIR to verify tax assessments.
Once enacted, the bill will also require gaming operators of the regulated activities under the bill 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 the bill.
“This measure is consistent with my view that all gambling activities that the law allows should be highly beneficial to the government’s fiscal position. Otherwise, what is the point of allowing them?” the House tax panel chair said.
He also said that the added regulatory oversight requirements will help the government rein in these activities whenever necessary.
“Nandyan na ‘yan. Legal na sa maraming bayan. Pakinabangan na ‘lang natin dahil kailangan ng gobyerno ng pondo para labanan ang COVID-19. At lagyan ng safeguards, para kayang bantayan ng gobyerno,” Salceda remarked.
“Otherwise, without a national government share and without national government regulations, it’s a free-for-all at the local level. That’s never good when you’re talking about gaming, an activity with valid public concerns.” Salceda said.
The regulations in Salceda’s bill will also help the government identify which firms to regulate better.
Salceda cited his committee’s efforts to tax Philippine Offshore Gaming Operations (POGOs) and help the BIR regulate them more effectively.
“Tulad po sa POGO, my principle in regulating gaming is simple. Where there are regulatory gray areas, we will shed light on them. My committee’s approach to ambiguities in areas and sectors of concern is what I call the ‘Sunshine Principle’ to taxation. If there are issues, sunlight is the best disinfectant,” Salceda said.