FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. 2474 
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Introduced by S(mator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
Executive Order 194, entitled "Restructuring the 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 a result, the industry registered robust increase 
in gross sale by 48.43% and substantial number of new stakeholders. 
The passage of Republic Act No. 7660 amended Executive Order 94, 
which resulted in the increase of taxes of the horseracing industry. Consequently, 
the local horseracing industry registered a topsy-turvy growth. It become one of 
the most highly taxed among its counterpart abroad even higher than that of 
Hong Kong which is 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 in order 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 foregoing, the passage of this bill is earnestly sought. 
g/ ) 
MANUEL "LITO" M. LAPID 
Senator 
(If" 


FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. 2474 
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) 
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Introduced by Senator Manuel "Lito" M. Lapid 
AN ACT 
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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 Nationallntemal Revenue Code of 1997, 
as amended is hereby further amended to read as follows: 
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"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, forcast/quinella 
and trifecta bets, the tax shall be four percent (4%)]. x x x 
"xxx.)) 
SECTION 2. 
Section 190. Stamp Tax on Jai-alai, Horse Race Tickets, 
Lotto or Other Authorized Numbers Games. - (A) Once each jai-alai, [horse race 
ticket,] lotto, or other authorized numbers games, there shall be collected a 
documentary stamp tax of Ten centavos (PhpO.10): Provided, That if the cost of the 
ticket exceeds One peso (Php1.00)" an additional tax of Ten centavos (PhpO.10) on 
every One peso (Php1.00), or fractional part thereof, shall be collected. 
U(B) 
STAMP TAX ON HORSE RACE TICKETS. - ON EACH HORSE RACE 
TICKETS, THERE SHALL BE COLLECTED A DOCUMENTARY STAMP TAX OF 
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FIVE CENTAVOS (PHPO.05): PROVIDED, THAT IF THE COST OF THE TICKET 
EXCEEDS ONE PESO (PHP1.00), AN ADDITIONAL TAX OF FIVE CENTAVOS 
(PHPO.05) FOR EVERY ONE PESO (PHP1.00) 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 Section 8 and 10 of Republic Act No. 7953, 
entitled: "An Act Amending Republic Act No. 6632, entitled: 'Ac 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 provision of this Act is held 
invalid or unconstitutional, the other provisions not affected thereby shall remain valid 
and subSisting. 
SECTION. 6. 
Effectivity Clause. - This Act shall take effect fifteen (15) 
days following its publication in two (2) newspapers of general circulation or in the 
Official Gazette. 
Approved, 
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