FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES _—)
First Regular Session )
HOUSE OF REPRESENTATIVES

ARRE
House Bill No, 2832

Introduced by Representative Rufus B, Rodriguez and
Representative Maximo B. Rodriguez, Jr.

EXPLANATORY NOTE

Gross income is defined by Republic Act No. 8424, otherwise known as
the Tax Reform Act of 1997, as amended, as “Except when otherwise provided
in this Title, gross income means all income derived from whatever source,
including (but not limited to) the following items:

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(9) Prizes and winnings;
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As such, it would seem that there is no reason why Philippine Charity
Sweepstakes and Lotto winnings cannot be taxed.

It cannot be denied that there are instances when the jackpot prizes for
the numbers game lotto reach hundreds of millions of pesos and it is not
uncommon for jackpot prizes of lotto to reach 100, 200, 300 million and higher.
This could amount to much needed tax revenues for the Philippine government,

In the most recent case of the balikbayan winner of the P741_ million
jackpot, the US government received over P200 million as tax revenues
because the winner is a US citizen. That P200 million could have instead gone
to the Philippine government if only lotto winnings are taxed in the Philippines.

In view of the foregoing, immediate passage of this bill is earnestly
requested.

RUFUS B. ROBRIGUEZ

MAXIMG'B. RODRIGUEZ, JR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

ARS
House BillNo. 4832

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

AN ACT
FURTHER AMENDING REPUBLIC ACT 8424, OTHERWISE KNOWN AS
“AN ACT AMENDING THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED, AND FOR OTHER PURPOSES” BY REMOVING THE TAX
EXEMPTION ON SWEEPSTAKES AND LOTTO WINNINGS IN THE
PHILIPPINES

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

SECTION 1. Prizes from the Philippine Charity Sweepstakes and all forms of
the numbers game Lotto are hereby declared to be taxable.

SEC 2. Sec. 24 (B)(1) is hereby amended to read as follows:

SEC, 24. Income Tax Rates. -

(B) Rate of Tax on Certain Passive Income.

(1) Interests, Royalties, Prizes, and Other Winnings. - A final tax at the
rate of twenty percent (20%) is hereby imposed upon the amount of interest
from any currency bank deposit and yield or any other monetary benefit from
deposit substitutes and from trust funds and similar arrangements; royalties,
except on books, as well as other literary works and musical compositions,
which shall be imposed a final tax of ten percent (10%); prizes (except prizes
amounting to Ten thousand pesos (P10,000) or less which shall be subject to
tax under Subsection (A) of Section 24; and other winnings [(except Philippine

Charity Sweepstakes and Lotto winnings)], derived from sources within the
Philippines.
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SEC. 3. Sec. 25 (A)(2) is hereby amended to read as follows:

SEC. 25. Tax on Nonresident Alien Individual. -

(A) Nonresident Alien Engaged in trade or Business Within the
Philippines. -

(2) Cash andlor Property Dividends from a Domestic Corporation or
Joint Stock Company, or Insurance or Mutual Fund Company or Regional


Operating Headquarters or Multinational Company, or Share in the
Distributable Net Income of a Partnership (Except a General Professional
Partnership), Joint Account, Joint Venture Taxable as a Corporation or
Association., Interests, Royalties, Prizes, and Other Winnings. - Cash and/or
property dividends from a domestic corporation, or from a joint stock company,
or from an insurance or mutual fund company or from a regional operating
headquarters of multinational company, or the share of a nonresident alien
individual in the distributable net income after tax of a partnership (except a
general professional partnership) of which he is a partner, or the share of a
nonresident alien individual in the net income after tax of an association, a joint
account, of a joint venture taxable as a corporation of which he is a member or
a co-venturer; interests; royalties (in any form); and prizes (except prizes
amounting to Ten thousand pesos (P10,000) or less which shall be subject to
tax under Subsection (B)(1) of Section 24) and other winnings [(except

Philippine Charity Sweepstakes and Lotto winnings)]; shall be subject to an
income tax of twenty percent (20%) on the total amount thereof,
XXX XXX XXX

SEC. 5. Implementing Rules and Regulations - The Philippine Charity
Sweepstakes Office and the Bureau of Internal Revenue shall issue the rules
and regulations necessary for the full implementation of this Act.

SEC. 6. Separability Clause — If for any reason, any provision or section of this
Act is declared unconstitutional, such portions not affected thereby shall remain
in full force and effect.

SEC. 7. Repealing Clause — All laws, decrees, executive orders, department or
memorandum orders and other administrative issuances or parts thereof which
are inconsistent with the provisions of this Act are hereby modified, superseded
or repealed accordingly.

SEC. 8. Effectivity Clause - This Act shall take effect after fifteen (15) days

following the completion of its publication in the Official Gazette or in at least
two (2) newspapers of general circulation in the Philippines.

Approved,