House approves on second reading taxes on online sabong, derbies

The House of Representatives on Wednesday approved on second reading the measure imposing new taxes on online locally-licensed cockfights and derbies.

In a vote of ayes and nays, the chamber approved House Bill 8065, which seeks to amend Section 125 of the National Internal Revenue Code of 1997, principally authored by House Committee on Ways and Means chair Joey Salceda.

Under the substitute measure, a tax equivalent to 5% based on gross gaming receipts from offsite betting activities on locally-licensed cockfights and derbies will be imposed on online cockfighting and offline betting station operators, to be remitted directly to the Bureau of Internal Revenue (BIR).

This tax, however, should not be in lieu of local government taxes and regulatory fees and charges applicable to such activities.

The measure defines "offsite betting activities on locally-licensed cockfights and derbies" as cockfighting activities that involve placing, acceptance, and facilitation of wagers through remote or electronic means and licensed by local government units.

Offsite betting, however, does not include games and activities authorized by law to be performed by other gaming authorities such as the Philippine Amusement and Gaming Operation and the Philippine Charity Sweepstakes Office.

Meanwhile, "gross gaming receipts" include all receipts including income derived from "plasada" or net commission from offsite betting on locally authorized and remotely broadcast cockfight matches.

In filing the measure, Salceda said its primary goal is to make the industry of online sabong and other related games more transparent and accountable.

“The operations of online betting on sabong 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," he said.

"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 BIR collection from cockpits of P13.7 million in 2019,” he added. -NB, GMA News