Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 1157)
The main purpose of Presidential Decree No. 1157 is to increase the rates of tax on winnings in Jai-Alai and horse-racing and to increase the government's share from the sweepstakes total prize fund for additional revenue for national development.
A tax equivalent to ten percent (10%) of the winnings or dividends is imposed on every person who wins in horse races or Jai-Alai.
The tax is deducted from the dividends corresponding to each winning ticket and withheld by the operator, manager, or person in charge before paying the dividends to the winner.
Yes, owners of winning race horses are subject to the same ten percent tax on their winnings, collected in the same manner.
It amends Section 4 to stipulate that the horse races and the sale of tickets in charity horse race sweepstakes shall be exempt from all taxes except that each ticket must bear a twelve-centavos internal revenue stamp and five percent of the total prize fund shall be paid to the Bureau of Internal Revenue.
The Board of Directors may determine the procedure to be followed in the distribution of prizes in the most just, equitable, and expeditious manner.
Sweepstakes prize winners' prizes are exempt from income tax after the five percent deduction from the total prize fund has been paid to the Bureau of Internal Revenue.
The tickets are considered government securities for the purposes of penalizing forgery or alteration.
The decree took effect immediately upon its signing on June 3, 1977.
The President of the Philippines, by virtue of the powers vested by the Constitution, ordered and decreed PD No. 1157.