Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

House Bill No. __444'7

Introduced by the Hon. Jeci A. Lapus

EXPLANATORY NOTE

Executive Order 194, entitled “restructuring and Providing for the Distribution of
Receipts in Horse Racing and for Other Purposes” was implemented in 1988. Effectively,
the said scheme reduced taxes on winnings by as much as five percent (5%). As such, the
industry registered robust increase in gross sale by 48.43% and substantial number of
new stakeholders. .

Republic Act No. 7660 amended EO 194 in 1994, which increased the taxes of
the industry. Consequently, the local (horseracing) industry registered a topsy-turvy
growth. It became one of the most highly taxed among its counterpart abroad even higher
than that of Hong Kong considered the pioneer of horseracing in this part of Asia.
Further, the said increase on taxation affected sales negatively and discourages new
stakeholders,

This proposal seeks to rationalize the tax on winnings and documentary stamp tax
on horseracing aimed to encourage wider public participation as well as increase on
probable stakeholders.

Eventually, the beneficial effect of this proposal would duplicate the industries’
1998 experience that raised revenue collections of the government

In view of the above-stated facts, passage of this bill is earnestly sought.

JEQI A. LAPUS


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

House Bill No. i1'7

Introduced by the Hon. Jeci A. Lapus

AN ACT
RATIONALIZING THE TAX ON WINNINGS AND
DOCUMENTARY STAMP TAX ON HORSE RACING, AMENDING
FOR THE PURPOSE SECTIONS 126 AND 190 OF THE NATIONAL
INTERNAL REVENUE CODE OF 1997, AS AMENDED, SECTIONS
11 AND 13 OF REPUBLIC ACT NO. 8407, AND SECTIONS 8 AND 10
OF REPUBLIC ACT NO. 7953

Be it enacted by the Senate and House of Representatives of the
Philippines in Congress assembled.

SECTION 1. SECTION 126 OF THE National Internal Revenue
Code of 1997, as amended is hereby further amended to read as follows:

“SEC. 126 tax on Winnings. — Every person who wins in horse
races shall pay a tax equivalent to [ten percent (10%)] FOUR PERCENT
(4%) of his winnings or ‘dividends’, the tax to be based on the actual
amount paid to him for every winning ticket after deducting the cost of the
ticket [:Provided, that in case of winnings from double, Sorcast/quinella and
trifecta bets, the tax shall be four percent (4%)]. x x x

Ke xx”


SECTION 2. Section 190. Stamp Tax on Jai-alai, Horse Race Tickets,
Lotto or Other Authorized Numbers Games. — (A) On each jai-alai, [horse
race ticket,] lotto, or other authorized numbers games, there shall be
collected a documentary stamp tax of Ten centavos (P0.10): Provided, That
if the cost of the ticket exceeds One peso (P1.00), an additional tax of Ten
centavos (P0.10) on every One peso (P1.00), or fractional part thereof, shall
be collected.

“(B) STAMP TAX ON HORSE RACE TICKETS. — ON EACH
HORSE RACE TICKET, THERE SHALL BE COLLECTED A
DOCUMENTARY STAMP TAX OF FIVE CENTAVOS (P0.05):
PROVIDED, THAT IF THE COST OF THE TICKET EXCEEDS ONE
PESO (P1.00), AN ADDITIONAL TAX OF FIVE CENTAVOS (P0.05)
FOR EVERY ONE PESO (P1.00) OR FRACTIONAL PART
THEREOF SHALL BE COLLECTED.”

SECTION 3. Implementing Rules and Regulations. — The Secretary of
Finance shall, in consultation with the Commissioner of Internal Revenue
and the Chairman of the Philippine Racing Commission, promulgate the
necessary rules and regulations to effectively implement the provisions of
this Act.

SECTION 4. Repealing Clause. — Sections 11 and 13 of Republic Act
No. 8407, entitled: “An Act Amending Republic Act No. 6631, entitled: ‘an
Act Granting Manila Jockey Club, Inc., a Franchise to Construct, Operate
and Maintain a Racetrack for Horse Racing in the City of Manila or Any
Place Within the Provinces of Bulacan, Cavite or Rizal’ and Extending the
Said Franchise by Twenty-five (25) Years from the Expiration of the Term
Thereof’, and Sections 8 and 10 of Republic Act No. 7953, entitled: “An Act
Amending Republic Act No. 6632, entitled, entitled: ‘An Act Granting the
Philippine Racing Club, Inc. a Franchise to Operate and Maintain a race
Track for Horse racing in the Province of Rizal’, and Extending the said
Franchise by Twenty-five (25) Years from the expiration of the Term
thereof” are accordingly hereby amended.


All other laws, presidential decrees, executive orders, rules and
regulations or parts thereof which are inconsistent with any of the provisions
of this Act are hereby repealed, amended or modified accordingly

SECTION 5. ~ Separability Clause. — If any part or provision of this
Act shall be held unconstitutional or invalid, other provisions hereof which
are not affected thereby ahlll continue to be in full force and effect.

SECTION 6. Effectivity Clause. — This Act shall take effect fifteen
(15) days after its publication in the Official Gazette or in any two (2)
newspapers of general circulation, whichever comes earlier.

Approved.