A bill that seeks to tax offsite betting, particularly on the popular cockfighting game, ‘sabong’ is expected to raise at least P1.25 billion on its first full year of implementation, or 90 times over the current government collection of P13.7 million from cockpits.
Albay Rep. Joey Sarte Salceda, House Ways and Means Committee chair, principally authored the bill and helped steer its approval by the House with a vote of 215 affirmative, one (1), negative and no abstention, on third and final reading last December 15.
Salceda said HB 8065 will impose new taxes on offsite betting on locally-licensed games, including electronic betting on ‘Sabong’ and related untaxed and non-essential activities, and help boost government revenues to fund Covid-19 response and recovery measures.
“Simply put, it focuses on untaxed activities 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,” he said.
“The bill taxes an existing industry that is not yet being taxed, without causing any economic harm, as wagering is an activity that is in-elastic non-essential,” he added, noting that the operations of online Sabong betting 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 Bureau of Internal Revenue (BIR) collection from cockpits of P13.7 million in 2019,” Salceda stressed.
Key administration officials pressured to explore various possible means to raise necessary funds, have expressed optimism the bill’s approval will help revive the country’s pandemic-hit economy, which contracted at a slower rate of 11.5 percent in the third quarter of 2020.
Under Salceda’s proposal, the tax shall be five percent (5%) of gross revenues derived from offsite betting activities on locally licensed games and shall not be in lieu of taxes required by the local government units (LGUs) and regulatory fees and charges imposed by other agencies.
LGUs will still have full regulatory and revenue collecting powers over in-premise games and betting. The proposal also empowers the BIR to accredit and inspect totalizators and other gambling devices used to verify tax assessments, while allowing LGUs to maintain full authority to license the games under their jurisdiction, and impose whatever local taxes they want to.
To ensure transparency and accountability in these activities, the bill 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 agencies of government, This requirement will help ensure the government can monitor the activities of such operators.
GAB said the industry is worth about P50 billion annually. LGUs are yet unable to collect revenues effectively from the industry. The Department of Finance, BIR and GAB have thrown their full support behind measure which will shortly be transmitted to the Senate for its own deliberations.