Imposition of 20% tax on lotto winnings sought

MANILA, Philippines - An administration lawmaker has proposed the imposition of a 20 percent tax on online lottery winnings or earnings whose proceeds would be earmarked for education and housing programs only.

However, Quezon City Rep. Winston Castelo, author of House Bill 4774, stressed that the proposed tax would be imposed only on the grand prizes of the lotto games run by the Philippine Charity Sweepstakes Office (PCSO).

“Lotto draws gain for the government on one end and the betting universe on the other. If an awesome amount of money is won, the winner takes home such bagful of money that is sure to improve his lot and that of his extended family, close relatives and associates. Sometimes, the winner also shares the blessings with a small circle of private individuals only known to him,” Castelo, vice chairman of the House committee on housing and urban development, said.

“I think it is understandable that the proposed tax would be only for the grand prizes, being a sizable amount, to ‘democratize’ the system,” he said.

He said it is the declared policy of the State to promote the general welfare hence, toward this end, benefits should be democratized to reach as many people and beneficiaries as possible in accordance with the law.

He said the bill aims to institutionalize this mode of sharing the blessings gained by, for example, a single winner of a lotto pot or grand draw that could reach as high as a billion pesos.

“The bill finds it proper, even reasonable, to tax at least 20 percent of these lotto winnings or earnings, of which 10 percent shall be used for education and 10 percent for housing purposes as the appropriate agencies of the government may so implement,” Castelo said.

He said people should also learn from the lessons of the past, citing as an example the case of one grand winner whose lotto winnings and earnings were taxed in favor of a foreign government of which the winner is a citizen.

The bill provides further the PCSO shall ensure full implementation of the measure once enacted into law.

The PCSO runs several lottery games including the lotto games 6/42, 6/45. 6/49, and 6/55 or the Grand Lotto.

A lone better won the biggest lotto jackpot in Philippine history of P741 million in the Grand Lotto in November last year.

Loterya applicants

Gambling lords and newly formed gaming firms have joined the competing groups that have applied to secure licenses to operate the newly launched PCSO Loterya ng Bayan.

A PCSO source told The STAR that new gaming corporations want to join the legal numbers game business while known illegal gambling lords have also formed their own corporations to transform their illegal jueteng operations to the legal Loterya ng Bayan in their respective provinces.

Among the hotly contested areas for permit to operate the new town lottery are Baguio City, Bulacan, Pangasinan, Albay, Batangas, Cavite Laguna, Oriental Mindoro, Occidental Mindoro, Quezon, Rizal, Negros Oriental, and Iloilo.

Records at the PCSO showed that at least 180 gaming firms have applied for permits to operate the Loterya ng Bayan.

Gaming firms from Laguna topped the list of applicants with 14 applications, followed by Baguio and Bulacan with 11, eight each from Albay, Batangas, and Cavite, seven each from Pangasinan and Oriental Mindoro, and five each from Bataan, Camarines Norte, and Quezon.

Under the PCSO guidelines, only one Loterya drawing station for each province and highly urbanized city would be given license.

The PCSO has set a June 30 deadline for the submission of applications for Loterya permit, including operators of the defunct Small town lotteries (STL).

STL operators who filed applications to shift to the Loterya ng Bayan are gaming firms operating in Bataan, Bulacan, Nueva Ecija, Pampanga, Subic, Santiago City in Isabela, Camarines Sur, Occidental Mindoro, Oriental Mindoro, Quezon, Sorsogon, Negro Oriental and Iloilo province.

The controversy over the operations of STL cropped up during a congressional hearing where retired Dagupan City Archbishop Oscar Cruz revealed the name of gambling lords who are also operators of STL.

Police officials who testified during the hearing said that they could not launch a crackdown against illegal gambling operators because they are also licensed operators of STL.

Illegal gambling lords even launched their own version of the STL.

According to reports illegal bookies or STL copycats have proliferated in Laguna, Batangas, Quezon and other parts of Luzon. – Perseus Echeminada