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Republic of the Philippines    
House of Representatives     
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ______ 
________________________________________________________________ 
Introduced by Congressman Jorge “PATROL” Bustos 
________________________________________________________________ 
EXPLANATORY NOTE 
The Philippine Charity Sweepstakes Office (PCSO) was created to be the 
principal government agency for raising and providing funds for health 
programs, medical assistance and services, and charities of national character 
through the conduct of charity sweepstakes races, lotteries, and other similar 
activities. At present, PCSO remains as an indispensable arm of the government 
that provides funding for essential health and welfare activities and programs 
nationwide.      
  However, under Republic Act No. 10963, otherwise known as the “Tax 
Reform for Acceleration and Inclusion (TRAIN),” amending the National 
Internal Revenue Code of 1997, as amended, which was approved on December 
27, 2018, additional taxes were imposed on PCSO. These new tax impositions 
include, among others: a) 20% final tax on winnings above P10,000 from 
Philippine Charity Sweepstakes and lotto; b) 30% corporate income tax 
payment; and c) increase in the documentary stamp tax on tickets, lotto and 
other authorized number games from 10% to 20%. 
These changes in PCSO’s tax treatment are inconsistent with the nature of 
PCSO as a charitable institution. In line with settled jurisprudence, PCSO is a 
charitable institution because it provides services to the public which would 
otherwise fall on the shoulders of government.  Thus, as a matter of policy, 
taxes are forgone in favor of charitable institutions because they assume part of 
the burden to address public needs, and the loss of taxes by the government is 
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compensated by its relief from doing public works which would have been 
funded by appropriations from the National Treasury. 
   
  
In view of the foregoing, the taxation of PCSO must be rationalized so that 
it may fulfill its mandate, and ultimately, assist the National Government in 
raising and providing funds for charity. 
  
 
Hence, approval of this bill is earnestly sought. 
 
 
 
 
 
CONG. JORGE “PATROL” BUSTOS 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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Republic of the Philippines    
House of Representatives     
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ______ 
________________________________________________________________ 
Introduced by Congressman Jorge “PATROL” Bustos 
________________________________________________________________
AN ACT 
RATIONALIZING THE TAX TREATMENT FOR THE PHILIPPINE 
CHARITY 
SWEEPSTAKES 
OFFICE, 
AMENDING 
FOR 
THE 
PURPOSE THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS 
AMENDED  
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1.  Section 24 of the National Internal Revenue Code of 1997, 
as amended, is hereby further amended to read as follows: 
"SEC. 24.  Income Tax Rates. – xxx 
“(A) 
xxx 
“(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, 
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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 winnings [amounting to Ten 
thousand pesos (P10,000) or less] from Philippine 
Charity Sweepstakes and Lotto which shall be exempt), 
derived from sources within the Philippines:  Provided, 
however, That interest income received by an 
individual taxpayer (except a nonresident individual) 
from a depository bank under the expanded foreign 
currency deposit system shall be subject to a final 
income tax at the rate of fifteen percent (15%) of such 
interest income: Provided, further, That interest 
income from long-term deposit or investment in the 
form of savings, common or individuals trust funds, 
deposit substitutes, investment management accounts 
and other investments evidenced by certificates in such 
form prescribed by the Bangko Sentral ng Pilipinas 
(BSP) shall be exempt from the Tax imposed under 
this Subsection:  Provided, finally, That should the 
holder of the certificate pre-terminate the deposit or 
investment before the fifth (5th) year, a final tax shall 
be imposed on the entire income and shall be deducted 
and withheld by the depository bank from the proceeds 
of the long-term deposit or investment certificate based 
on the remaining maturity thereof: 


 
 
 
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“xxx.” 
SEC. 2.  Section 27 of the same Code is hereby further amended to read as 
follows: 
"SEC. 27.  Rates of Income Tax on Domestic Corporations. – 
“(A) 
In General. – xxx 
“xxx 
“(C) 
Government-owned or -Controlled Corporations, 
Agencies or Instrumentalities. – The provisions of existing special 
or general laws to the contrary notwithstanding, all corporations, 
agencies, or instrumentalities owned or controlled by the 
Government, except the Government Service Insurance System 
(GSIS), the Social Security System (SSS), THE PHILIPPINE 
CHARITY SWEEPSTAKES OFFICE (PCSO), the Philippine 
Health Insurance Corporation (PHIC), and the local water districts 
shall pay such rate of tax upon their taxable income as are imposed 
by this Section upon corporations or associations engaged in 
similar business, industry, or activity. 
“xxx.” 
SEC. 3.  Section 190 of the same Code is hereby further amended to read 
as follows: 
“SEC. 190.  Stamp Tax on Jai-alai, Horse Race, Tickets, Lotto 
or Other Authorized Numbers Games. – On each jai-alai, horse race 
ticket, lotto, or other authorized numbers games, there shall be 
collected a documentary stamp tax of [Twenty centavos (P0.20)] 
TEN CENTAVOS (P0.10):  Provided, That if the cost of the ticket 
exceed One peso (P1.00), an additional tax of [Twenty centavos 


 
 
 
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(P0.20)] TEN CENTAVOS (P0.10) on every One peso (P1.00), or 
fractional part thereof, shall be collected.” 
SEC. 4.  The Secretary of Finance shall, within thirty (30) days from the 
effectivity of this Act, issue the rules and regulations necessary for the effective 
implementation of this Act.  
SEC. 5.  All laws, rules and regulations, or parts thereof inconsistent with 
the provisions of this Act, are hereby repealed or modified accordingly. 
SEC. 6.  This Act shall take effect fifteen (15) days after its publication in 
the Official Gazette or in a newspaper of general circulation. 
 
Approved,