THIRTEENTH CONGRESS 
IF THE WEPUBhl 
1 
OF THE PHILIPPINE 
1 
First Regular Session 
b 
'04 
JWM 
N A T  
. No. 
Introduced by Senator S.'R. srnefia Ill 
.. 
EXPLANATORY NOTE 
This bill seeks to amend Sections 126 and 190 of the National Internal 
Revenue Code of 1997 for the purpose of rationalizing the tax on winnings in horse 
racing and documentary stamp tax on horse race tickets, lotto, jai-alai and other 
authorized number games. 
.
.
 I 
The bill specifies the coverage of the tax so as to avoid any misinterpretation on 
the application of the National Internal Revenue Code on these areas and as much as 
is foreseeable, eliminate any possible loophole in the existing law. 
In view hereof, approval of this measure is highly recommended. 
S E ~ G I O  
OSMENA 111 
Senator 
/rlg 
'. . 


THIRTEENTH CONGRESS OF THE REPUBLIC 
First Regular Session 
1 
OF THE PHILIPPINE§ 
) 
3 
I
r
 
Introduced by Senator S. R. Osmefia Ill 
, 1 , irn- 
i “ 
1 
AN ACT 
RATIONALIZING THE TAX ON WINNINGS AND DOCUMENTARY STAMP TAX ON 
HORSE RACING, AMENDING FOR THE PURPOSE SECTIONS 126 AND I90 OF 
THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, SECTIONS 
I 1  AND 13 OF REPUBLIC ACT NO. 8407 AND SECTIONS 8 AND I 0  OF 
REPUBLIC ACT NO 7953 
Be it enacted by the Senate and the House of Represenfafives of the Republic of the 
Philippines in Congress assembled: 
I 
2 
3 
4 
5 
6 
7 
8 
9 
I O  
I I  
12 
13 
14 
15 
16 
17 
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%) 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 the case of winnings from double, forecast/ quinella and trifecta bets, 
the tax shall be four percent (4%).] 
PROVIDED, THAT IN THE CASE OF 
WINNINGS FROM THE FOLLOWING SPECIAL BETS, THE TAX SHALL 
BE EQUIVALENT TO FOUR PERCENT (4%): 
(I) 
“DAILY DOUBLE EVENT” IS A RACING EVENT WHEREIN THE 
BETTOR SELECT AND BETS ON A NUMBER IN EACH OF TWO 
(2) CONSECUTIVE RACES, AND THE SELECTED NUMBERS IN 
THE TWO (2) RACES MUST FINISH “FIRST” IN ORDER TO WIN. 
“EXTRA DOUBLE EVENT” IS A RACING EVENT WHEREIN THE 
BETTOR SELECTS AND BETS ON A NUMBER IN EACH OF THE 
TWO (2) DESIGNATED RACES AND THE SELECTED NUMBERS 
(2) 
I 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
1 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
IN THE TWO (2) RACES MUST FINISH “FIRST” IN ORDER TO 
WIN. 
(3) “FORECAST EVENT” IS A RACING EVENT WHEREIN THE 
BETTOR SELECTS AND BETS ON TWO (2) NUMBERS IN A 
SIGNLE RACE AND THE SELECTED NUMBERS MUST FINISH 
“FIRST” AND “SECOND” IN THEIR CORRECT ORDER OF 
SELECTION IN ORDER TO WIN. 
“DOUBLE QUINELLA” EVENT IS A RACING EVENT WHEREIN 
THE BETTOR SELECTS AND BETS ON TWO (2) NUMBERS IN 
EACH OF TWO (2) DESIGNATED RACES AND THE SELECTED 
NUMBER IN THE TWO (2) RACES MUST FINISH “FIRST” AND 
“SECOND” IN EITHER ORDER OF SELECTION IN ORDER TO 
WIN. 
(4) 
(5) “TRIFECTA EVENT 
IS A RACING EVENT WHEREIN THE 
BETTOR SELECTS AND BETS ON THREE (3) NUMBERS IN A 
SINGLE RACEAND THE SELECTED NUMBERS MUST FINISH 
“FIRST,” “SECOND” AND “THIRD” IN THEIR CORRECT ORDER 
OF SELECTION IN ORDER TO WIN. 
(6) “DAILY DOUBLE+I EVENT IS A RACING EVENT WHEREIN THE 
BETTOR SELECTS AND BETS ON THREE (3) NUMBERS IN 
THREE 
(3) 
DESIGNATED RACES AND 
THE 
SELECTED 
NUMBERS MUST FINISH “FIRST IN ORDER TO WIN. 
.
.
 * 
(7) “PARI-MUTUEL EVENT” IS A RACING EVENT WHEREIN THE 
BETTOR SELECTS AND BETS ON A NUMBER IN A RACE AND 
THE SELECTED NUMBER MUST FINISH: 
(7.1) WIN 
- 
FIRST PLACER ONLY IN A RACE 
(7.2) PLACE 
- 
FIRST OR SECOND OR THIRD 
PLACER IN A RACE 
2 


7 
8 
9 
10 
I 1  
.
.
 I 
In the case of owners of winning race horses, the tax shall be ten 
percent (I 0%) of the prizes. 
"The tax herein prescribed shall be deducted from the 'dividends' 
corresponding to each winning ticket or the 'prize' of each winning race 
horse owner and withheld by the operator, manager or person in charge 
of the horse races before paying the dividends or prizes to the persons 
entitled thereto. 
"The operator, manager or person in charge of horse races shall, 
within twenty (20) days from the date the tax was deducted and withheld 
in accordance with the second paragraph hereof, file a true and correct 
return with the Commissioner in the manner or form to be prescribed by 
12 
13 
14 
SEC. 2. Sec. I90 of the same Act, as amended, is hereby further 
the Secretary of Finance, and pay within the same period the total 
amount of tax so deducted and withheld." 
15 
16 
""SEC. 190. Stamp Tax on Jai-alai, Horse Race Tickets, Lotto or Other 
17 
Authorized Numbers Games. - 
On each jai-alai, [horse race ticket,] lotto, 
18 
or other authorized numbers games, there shall be collected a 
19 
documentary stamp tax of Ten centavos (PO.10): Provided, That if the 
20 
cost of the ticket exceeds One peso (Pl.OO), an additional tax of Ten 
21 
centavos (PO.10) on every One peso (Pl.OO), or fractional part thereof, 
22 
shall be collected. 
amended to read as follows: 
.
.
 , 
23 
(B) STAMP TAX ON HORSE RACE TICKETS. - ON EACH HORSE 
24 
RACE TICKET, THERE SHALL BE COLLECTED A DOCUMENTARY 
25 
STAMP TAX OF TEN CENTAVOS (PO.10): PROVIDED, THAT IF THE 
26 
COST OF THE TICKET 
EXCEEDS ONE PESO 
(Pl.OO), AN 
27 
ADDITIONAL TAX OF TEN CENTAVOS (PO.10) FOR EVERY ONE 
28 
PESO (Pl.00) OR FRACTIONAL PART THEREOF SHALL BE 
29 
COLLECTED: PROVIDED, FURTHER, THAT IN THE CASE OF DAILY 
3 


I 
2 
3 
4 
5 
6 
7 
8 
9 
10 
I I  
12 
13 
14 
15 
16 
17 
DOUBLE, DAILY DOUBLE+I , EXTRA-DOUBLE, FORECAST, DOUBLE 
QUINELLA, TRIFECTA AND PARI-MUTUEL BETS, THE TAX SHALL BE 
FIVE CENTAVOS (P.0.05) ON EVERY ONE PESO (Pl.00) 
WORTH OF 
TICK ET .'I 
SEC. 3. Implementing Rules 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 for the immediate and effective implementation of this Act. 
SEC. 4. Repealing Clause. - This Act specifically amends Sections 11 
and 13 of Republic Act No. 8407 and Sections 8 and 10 of Republic Act No. 
7953. All other laws, decrees, executive orders, rules and regulations, or parts 
hereof inconsistent with the provision of this Act are hereby repealed, amended 
or modified accordingly. 
SEC. 5. This Act shall take effect fifteen (15) days after its publication in 
the Official Gazette or in at least two (2) newspapers of general circulation 
whichever comes earlier. 
Approved, 
'. . 
4