

The Philippine Charity Sweepstakes Office (PCSO) and the Philippine Amusement and Gaming Corporation (PAGCOR) are actively pushing for a reduction in taxes on casino and lotto winnings. The proposed Passive Income and Financial Intermediary Taxation Act (PIFITA), currently under discussion in the Senate Committee on Ways and Means, aims to simplify the tax rate on passive income to 15 percent, with the goal of enhancing compliance.
During the second public hearing on this tax proposal, PCSO Chairman Junie Cua expressed the desire to cut the tax on lotto winnings from 20 percent to 10 percent, particularly to benefit financially challenged bettors. Cua emphasized that many lotto participants come from impoverished backgrounds, using what little remains from their daily expenses to engage in betting.
PCSO is also advocating for a reduction in its documentary stamp tax (DST) obligations from 20 percent to 10 percent. Atty. Kat Contacto of PCSO highlighted that, despite the charity fund reaching P18.3 billion last year, a substantial 67 percent (P12.2 billion) went towards DST. Contacto recalled the agency’s attempt to pass on the DST cost to bettors in 2018, which led to a decline in ticket sales in 2019. Eventually, PCSO absorbed the costs to maintain attractive ticket prices.
Due to the DST significantly impacting the charity fund, only 11 percent (P2 billion) was allocated to PCSO’s Medical Access Program in 2023. For 2024, the agency estimates that P14 billion will be spent on DST, leaving only P1.68 billion for beneficiaries of the Medical Access Program. However, if the proposed tax reduction is approved, PCSO anticipates an additional P3 billion to support the program, bringing the total funds to P4.9 billion.
PCSO representatives appeal to the Senate for assistance, emphasizing that charity is the raison d’être of PCSO, and its income is vital for fulfilling its mandate.
In a related perspective, PAGCOR Corporate Services Department Assistant Vice President Atty. Arnold Salvosa proposed that casino winnings be tax-exempt, likening them to unexpected windfall profits. Salvosa cited Singapore and Macau, PAGCOR’s closest Asian competitors, where casino winnings are not subjected to taxation, treating them as windfalls rather than regular income. Drawing inspiration from the United States’ taxation system, Salvosa suggested aligning casino winnings with individual income tax based on their use as a business or a source of income.
It is good that the gaming regulator and agencies are advocating for reduced winnings taxes. This will keep the gaming industry in the Philippines more competitive with other gaming jurisdictions in the area. Anything that is seen as beneficial to players will promote and may increase player acquisition and retention where everyone, (government, operators, and players) will be winner.