QuestionsQuestions (PRESIDENTIAL DECREE NO. 720)
It aims to increase government revenues by imposing higher taxes on legalized gambling (jai-alai and horse-racing winnings), consistent with the policy that gambling income partly supports worthwhile government and charitable projects.
Section 260-A (Tax on Winnings) of the National Internal Revenue Code, as amended.
Ten percent (10%) of the winner’s winnings or dividends.
It is based on the actual amount paid to the winner for every winning ticket after deducting the cost of the ticket.
The operator, manager, or person in charge of the horse-races or jai-alai must deduct and withhold the tax from the dividends corresponding to each winning ticket before paying the dividends to the entitled person.
Yes. It provides that the same tax shall be collected from owners of winning race horses in the same manner.
Section 4 of Republic Act No. 1169 (Holding of sweepstakes) is amended.
When holding a sweepstakes race to determine prizes is impossible due to war, public calamity, or other unforeseen/fortuitous events, or when there is no sufficient number of horses to determine the major prizes.
The Board may determine the procedure for distributing prizes in the most just, equitable, and expeditious manner.
Yes. They are exempt from all taxes except for the internal revenue stamp requirement and the 5% deduction from the total prize fund.
Each ticket must bear a twelve-centavos internal revenue stamp.
An amount equivalent to five percent (5%) of the total prize fund from the proceeds of the sale of tickets.
Not later than ten (10) days after each sweepstakes.
It is paid to the BIR in lieu of the income tax previously collected from sweepstakes prize winners.
Yes. Any prizes paid out from the resulting prize fund after the 5% has been deducted are exempt from income tax.
They are printed by the government and are considered government securities for purposes of penalizing forgery or alteration.
It takes effect immediately.