EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
)
SENATE 
S. No. 2045
UJ OATC: 
ICP _____
03:25 pm
Introduced by Senator Ralph G. Recto
AN ACT
IMPOSING AMUSEMENT TAX ON DIGITAL PLATFORM AND OFFSITE 
BETTING STATIONS OF LICENSED COCKPITS, AND EARMARKING THE 
TOTAL AMUSEMENT TAX COLLECTION FROM COCKPITS FOR UNIVERSAL 
HEALTH CARE, AMENDING FOR THIS PURPOSE SECTION 125, AND 
CREATING A NEW SECTION 288-B OF THE NATIONAL INTERNAL REVENUE 
CODE OF 1997, AS AMENDED
EXPLANATORY NOTE
This proposed measure seeks to impose amusement tax on digital platform 
and offsite betting stations of licensed cockpits. Likewise, it seeks to earmark the total 
revenues collected from amusement tax on cockpits for universal health care.
Clearly, cockpit operators are already subject to amusement tax at the rate of 
18% based on gross receipts under Section 125 (a) of the National Internal Revenue 
Code (NIRC) of 1997, as amended. The said tax was first imposed in 1939 through 
C.A. No. 466 at the rate of 10%.1 In 1978, it was adjusted to 12% under PD No. 1456, 
and further increased to 18% in 1984 under PD No. 1959.2
However, with the advent of new technoiogy and in this age of digital economy, 
borderless economic activities pose a major chailenge to international taxation and 
raise the issue of territorial jurisdiction of the taxing authority.
1 Assessment of the Amusement Tax under Section 125, NIRC of 1997 (prepared by Ms. Ma. Berlie M. Limon, 
Tax Specialist II, Indirect Taxes Branch, NTRC).
2 Assessment of the Amusement Tax under Section 125, NIRC of 1997 (prepared by Ms. Ma. Berlie M. Limon, 
Tax Specialist II, Indirect Taxes Branch, NTRC).


When the NIRC was enacted, what our legislators had in mind at that time with 
regard to the subject of taxation is the brick-and-mortar activity of soiling goods and 
services. Therefore, it raises a legal question whether our existing tax laws also cover 
digital economic activities such as betting on cockfights and derbies through online or 
digital platforms, more popularly known as "e-sabong".
A law will not be construed as imposing a tax unless it does so dearly and 
expressly.3 In case of doubt, tax laws must be construed strictly against the 
government and in favor of the taxpayer.4 Taxes, as burdens that must be endured 
by the taxpayer, should not be presumed to go beyond what the law expressly and 
clearly declares.5
Hence, the inclusion of digital platforms and offsite betting stations of licensed 
cockpit operators in Section 125 of the NIRC of 1997, as amended, is necessary to 
remove any ambiguity or avoid the confusion whether or not this particuiar digitai 
economic activity known as "e-sabong" is taxable In our jurisdiction.
The total proceeds from the taxes collected on cockpits shail be earmarked for 
the Universal Health Care in order to provide the poor and marginaiized access to 
quality health and medical services, and to effectively reduce the out-of-pocket 
expenditures of the people so that they can have some funds left for other essential 
goods and services.
In view of the foregoing, the approval of this bill is earnestly sought.
/Jiao
3 B!R vs. First E-Bank Tower Condominium Corp., 6.R. Nos. 215801 and 218924, January 15,2020.
4 CIR V. SM Prime Holdings. Inc., 627 Phil. 581 (2010).
5 Philacor Credit Corporation v. CIR, 703 Phil. 26,46 (2013).
2


EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
)
SENATE 
S. No. 2045
03:25 pm
by:-T&------
. billswl NOE X
Introduced by Senator Ralph G. Recto
AN ACT
IMPOSING AMUSEMENT TAX ON DIGITAL PLATFORM AND OFFSITE 
BETTING STATIONS OF LICENSED COCKPITS, AND EARMARKING THE 
TOTAL AMUSEMENT TAX COLLECTION FROM COCKPITS FOR UNIVERSAL 
HEALTH CARE, AMENDING FOR THIS PURPOSE SECTION 125, AND 
CREATING A NEW SECTION 288-B OF 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:
1 
Section 1. Section 125 of the National Internal Revenue Code of 1997, as
2 
amended, is hereby further amended to read as follows:
3 
"SEC. 125. Amusement Taxes. - There shall be collected from the
4 
proprietor, lessee or operator of cockpits INCLUDING THEIR DIGITAL
5 
PLATFORM AND OFFSITE BETTING STATIONS, cabarets, night or day
6 
clubs, boxing exhibitions, professional basketball games, Jai-Alai and
7 
racetracks, a tax equivalent to:
8 
"(a) Eighteen percent (18%) in the case of cockpits INCLUDING
9 
THEIR DIGITAL PLATFORM AND OFFSITE BETTING STATIONS;
10 
"xxx
11 
"(e) Thirty percent (30%) in the case of Jai-Alai and racetracks - of their
12 
gross receipts, irrespective, of whether or not any amount is charged for
13 
admission.
14 
"For the purpose of the amusement tax, the term 'gross receipts'
15 
embraces all the receipts of the proprietor, lessee or operator of the


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
amusement place. Said gross receipts also include income from television, radio 
and motion picture rights, if any. A person or entity or association conducting 
any activity subject to the tax herein imposed shall be similarly liable for said 
tax with respect to such portion of the receipts derived by him or it.
"xxx"
Sec. 2. A new section designated as Section 288-B under Chapter II, Title XI 
of the National Internal Revenue Code of 1997, as amended, is hereby inserted and 
shall be read as follows:
"SEC. 288-B. DISPOSITION OF REVENUES FROM AMUSEMENT 
TAXON COCKPITS. - THE PROVISIONS OF EXISTING LAWS TO THE 
CONTRARY NOTWITHSTANDING, THE TOTAL REVENUES FROM 
AMUSEMENT TAX UNDER SECTION 125 OF THIS CODE ON COCKPITS 
INCLUDING THEIR DIGITAL AND OFFSITE BETTING STATIONS SHALL 
BE ALLOCATED AND USED EXCLUSIVELY IN THE FOLLOWING 
MANNER:
"(A) EIGHTY PERCENT (80%) TO THE PHILIPPINE HEALTH 
INSURANCE CORPORATION (PHILHEALTH) FOR THE 
IMPLEMENTATION OF REPUBLIC ACT NO. 11223, OTHERWISE 
KNOWN AS THE 'UNIVERSAL HEALTH CARE ACT' OF 2019; AND
"(B) TWENTY PERCENT (20%) SHALL BE ALLOCATED 
NATIONWIDE, BASED ON POLITICAL AND DISTRICT-SUBDIVISIONS, 
FOR MEDICAL ASSISTANCE, THE HEALTH FACILITIES ENHANCEMENT 
PROGRAM (HFEP), THE ANNUAL REQUIREMENTS OF WHICH SHALL 
BE DETERMINED BY THE DEPARTMENT OF HEALTH (DOH)."
Sec. 3. Implementing Rules and Regulations (IRR). - Within thirty (30) days 
from the effectivity of this Act, the Secretary of Finance, upon the recommendation of 
the Commissioner of Internal Revenue, and the Department of Health shall promulgate 
the necessary rules and regulations for its effective implementation.
Sec. 4. Separability Clause. - If any provision or part hereof is declared 
unconstitutional, the remainder of this Act or any provision not affected thereby shall 
remain in full force and effect.


1 
Sec. 5. Repealing Clause. - All laws, acts, decrees, executive orders, issuances,
2 
and rules and regulations or parts thereof which are contrary to and inconsistent with
3 
this Act are hereby repealed, amended or modified accordingly.
4 
Sec. 6. Effectivity. - This Act shall take effect fifteen (15) days after its
5 
compiete pubiication in the Official Gazette or in at least two (2) newspapers of general
6 
circulation.
Approved,