Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. __4°742

Introduced by the Honorable Anthony Rolando T. Golez, Jr.

EXPLANATORY NOTE

The Philippine Lottery has proved to be one, if not, the most exciting game of
chance in the country today. Almost all Filipinos play it, rich and poor. Even Filipinos
abroad and foreigners are enticed to play the often high yielding lottery. The Philippine
Charity Sweepstakes Office (PCSO) has successfully created games of chance that tickle
the fantasy of everyone to become instant millionaires.

The jackpot prize in the Philippine Lottery starts off at a minimum amount and
gets higher when no one wins, as bets of players are added to the minimum amount.
Jackpot prizes in lottery games sometimes reach hundreds of millions of pesos because
the ordinary Filipinos continue on betting as they try to reach their dreams of becoming
instant millionaires.

The present National Intemal Revenue Code grants an exemption to all lotto
winners, including non-resident aliens and non-resident citizens. The common Juan
Dela Cruz now asks, why will the millions of pesos pooled by ordinary Filipino bettors
and won by a non-resident alien or non-resident citizen be allowed to be taken outside
of the Philippines without any tax implication?

‘The jackpot prizes in PCSO games that are worth millions of pesos, if won by a
resident citizen, will cause a lot of economic activity in the country. Though tax-free,
‘once It gets spent here in the country, the Philippines and the Filipinos benefit because
of the economic activity It generates. However, a non-resident, more often than not, witl
spend the jackpot prize, which got huge because of the bets of millions of ordinary Juan
Dela Cruzes, in the country where he is a resident; the Philippines witl loses a large
amount of possible income and money that could have spurred additional economic


activity for the country, If millions of pesos worth of jackpot prizes will be taken out of
the country.

This Bill seeks to generate additional income for the State from winnings
obtained by non-resident aliens and non-resident citizens in the Philippine Lottery and
other games administered by the PCSO.

Approval of the bill is earnestly sought.

ne


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. __ 4742

Introduced by the Honorable Anthony Rolando T. Golez, Jr.

AN ACT IMPOSING A FINAL WITHHOLDING
TAX ON WINNINGS OF NON-RESIDENT ALIENS
AND NON-RESIDENT FILIPINOS FROM
THE PHILIPPINE LOTTERY AND OTHER:
GAMES ADMINISTERED BY THE PHILIPPINE
CHARITY SWEEPSTAKES OFFICE

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

Section 1, TITLE. This Act shall be known as the “Philippine Lottery Tax of
2011".

Section 2. DECLARATION OF POLICY. The State encourages the promotion
of a dynamic soclety and the creation of policies that will ensure economic activity and
Prosperity in the country.

Section 3. DEFINTION OF TERMS.

a, PCSO — refers to the “Philippine Charity Sweepstakes Office”


b. Lotto — refers to the Philippine Lottery games administered by the
Philippine Charity Sweepstakes Office.

c. Non-Resident Alien — refers to the Non-Resident Alien as defined by the
National Internal Revenue Code.

d. Non-Resident Citizen — refers to the Non-Resident Citizen as defined by
the National Internal Revenue Code.

Section 4. TAX ON NON-RESIDENT ALIENS. A final withholding tax of
‘Twenty Percent (20%) shall be impased on all non-resident aliens on all their winnings
from the totto and other games administered by the PCSO.

Section 5. TAX ON NON-RESIDENT CITIZENS. A final withholding tax of
Fifteen Percent (15%) shall be imposed on ail non-resident Filipinos on all their
winnings from the lotto and other games administered by the PCSO.

Section 6. COLLECTION. The PCSO shalt remit the fina! withholding tax
collected under this Act to the Bureau of Internal Revenue within ten (10) days after
the non-resident alien or non-resident citizen have collected his or her winnings from
the PCSO.

Section 7. REPEALING CLAUSE. - All laws, decrees, orders, rules and
regulations, or any part thereof inconsistent with this Act are hereby modified
accordingly or repealed.

Section 8, EFFECTIVITY. ~ This Act shall take effect fifteen (15) days after its
Publication in two (2) newspapers of general circulation.

APPROVED,