Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
FIRST REGULAR SESSION

£2

House Bill No.

Introduced by Honorable Amado S. Bagatsing

EXPLANATORY NOTE

Executive Order No. 194, entitled “Restructuring and 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 such, the
industry registered robust increase in gross sales by 48.43 % and in the substantial number of
new stakeholders

Republic Act No. 7660 amended EO 194 in 1994, which increased the taxes of the
industry. Consequently, the local horseracing industry registered a topsy-turvy growth. It
became one of the most highly taxed among its counterparts abroad even higher than that of
Hongkong which is considered the pioneer of horseracing in this part of Asia. Inevitably, the
said increase on taxation affected sales negatively and discouraged new stakeholders.

This proposed measure seeks to rationalize the tax on winnings and documentary
stamp tax on horseracing and is aimed to encourage wider public participation as well as
increase the number of potential stakeholders.

Hopefully, the beneficial effect of this proposal would reinvigorate the industry and
duplicate the 1988 experience that saw the tremendous increase in revenue collection of the
government.

Itis therefore urgently requested that this bill be approved immediately

Za

AMADO S. BAGATSING
Representative
5" District, Manila


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
FIRST REGULAR SESSION

House Bill No._ £2.

Introduced by Honorable Amado S, Bagatsing

AN ACT
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 in enacted by the Senate and the House of Representatives of the Philippine in
Congress assembled:

SECTION 1. Section 126 of the National Intemal 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%)] 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 ticket, [:Provided, That in case of winnings from double, forcasi/quinella and trifecta
bets, the tax shall be four percent (4%)}."xxxxxx

See. 2. Section 190 of the National Internal Revenue Code of 1997, as amended, is
hereby further amended as follows:
“Sec. 190, Stamp tax on Jai-alai, Horse Race Tickets, Lotto, or Other Authorized
Numbers Games. —
(A) On each jai-alai, [horse race ticket,] lotto, or other authorized numbers games,
there shall be collected a documentary stamp tax of Ten centavos (PO.10):
Provided, That if the cost of the ticket exceeds One Peso (P1.00), an additional
tax of Ten centavos (P0.10) on every One Peso (1.00), or fractional part thereof,
shall be collected
(B) STAMP TAX ON HORSE RACE TICKETS. - ON EACH HORSE RACE
TICKET, THERE SHALL BE COLLECTED A DOCUMENTARY


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STAMP TAX OF FIVE CENTAVOS (P0.05): PROVIDED, THAT IF THE
COST OF THE TICKET EXCEEDS ONE PESO (P1.00), AN ADDITIONAL
TAX OF FIVE CENTAVOS (P0.05) FOR EVERY ONE PESO (P1.00) OR
FRACTIONAL PART THEREOF SHALL BE COLLECTED.”

SEC. 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.

SEC, 4. ~ Repealing Clause. — Sections 11 and 13 of Republic Act No. 8407

entitled “An Act Amending R.A. 6631, entitled ‘An Act Granting Manila Jockey
Club, Inc. a franchise to construct, operate and maintain a race tack 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 years (25) from the expiration of the term
thereof” and Sections 8 and 10 of Republic Act No, 7953 entitled “An Act Amending
R.A. 6632, entitled ‘An Act Granting the Philippine Racing Club, Inc., a franchise to
operate and maintain a race tack for horse racing in the province of Rizal and
extending the said franchise by twenty-five 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.

SEC. 5. Separability Clause.- If any part or provision of this Act shall be held
unconstitutional or invalid, other provisions hereof which are not affected thereby
shall continue to be in full force and effect.

SEC. 6. Effectivity Clause. ~ This Act shall take effect fifteen (15) days after
its publication in the Official Gazette or in any two newspapers of general circulation,
whichever comes earlier.

Approved,