Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

A 1336

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 tive
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.

It is therefore urgently requested that this bill be approved immediately.

Bae

AMADO S. BAGATSING


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

1336

HOUSE BILL NO.

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
Philippines in Congress assembled:

SECTION 1, Section 126 of the National Internal Revenue Code of 1997, as
amended, is hereby further amended to read as follows:

“See. 126.
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 the case of winnings from
double, forcast/quinella and trifecta bets, the tax shall be four percent (4%)}.” XxxXxxx

SEC. 2. Section 190 of the National Internal Revenue Code of 1997, as
amended, is hereby further amended as follows:

on Winnings. ~ Every person who wins in horse races shall pay

“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 (0.10):
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 (P1.00), 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, Ine, 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.

Alll 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,