Tolentino: Government losing revenue from untaxed ‘e-sabong’ winnings

Jasmin Romero, ABS-CBN News

Posted at Mar 22 2022 01:18 AM

MANILA - Senator Francis Tolentino proposed crafting a new law enhancing the regulation of "e-sabong" to enable government to earn more out of the industry.

“We are now in a state of disarray, confused, further confused, letting go of a big amount that should have gone to the coffers of the government. Nagamit sana yung-pang ayuda ng mga drivers, ng mga magsasaka,” Tolentino said during the Senate Committee hearing on Public Order and Dangerous Drugs on Monday.

President Rodrigo Duterte recently denied proposals from Senate to suspend e-sabong, as this deprived government of revenues.

For Tolentino, government could have earned more because, unlike winnings from traditional betting games, e-sabong winners are not subject to 20 percent withholding tax.

“Ang lumalabas ngayon, walang buwis pa na natantanggap ang pamahalaan buhat ng e-sabong, unlike sweepstakes, lotto, binabawas kaagad ang lotto winnings, horseracing ... sa e-sabong wala pa? Bakit ganun? Kasi wala pa tayong batas sa e-sabong,” Tolentino said.

The senator proposed that the BIR come up with a circular that would implement a withholding tax, but the BIR said it already exists.

“Basically kinlarify namin ang taxation ng e-sabong operators … They have to pay 5 percent franchise (tax) du'n sa income nila from the Lazada or center bets. Tapos po they have to pay income tax and VAT dun sa income nila or sa gross bets sa internet o online betting, subject sa withholding tax,” Atty. Sixto Dy Jr., of the BIR Office of the Deputy Commission for Operations, said.

But Dy acknowledged there were no taxes from winnings where there should be.

“Dapat mayroong buwis,” he added.

The circular was also not specific about withholding taxes from winnings.

When asked who should withhold taxes, Dy said pitmasters should do it.

“But they are not aware of that role,” Tolentino responded.

Dy said his office could issue another circular where they can “investigate companies” and “assess them for the final withholding tax”.

However, this was questioned by the committee chairman.

“Siguradong sisigaw ang mga e-sabong operators kasi di na-witheld ang mga winnings eh. Paano makolektahin na iyon sa nanalo, nabigay na nila? I don't think so you can implement the circular clearly” Committee Chairman Senator Ronald “Bato” De la Rosa said.

“Under the tax code ang liability for this withholding ay mga operators kaya sila ang hahabulin,” Dy insisted.

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