The Philippine government has discovered a new way to tap into the country’s thriving gambling industry—create new taxes.
The National Tax Research Center (NTRC) recently came out with several ways to draw out revenue from “selected gambling and betting activities in the Philippines.” Among the suggestions was to create a new law that will impose a PHP3,500 ($74) entry fee on Filipino residents who use the country’s casinos.
According to the government think tank, that fee can be considered an “economic test” on the people who wish to enter a local casino. Under a presidential decree, Filipino residents with gross income of at least PHP50,000 are allowed to play in casinos, but the center said the “provision is neither observed nor imposed.”
“Thus, the [new] bill aims to discourage Filipinos from playing in casinos,” NTRC said in a note. “The proposal to charge an entrance fee in Philippine casinos amounting to PHP3,500 is supported since it would only be collected from those who have the financial capacity to splurge some money in the casinos.”
In 2014, Rep. Peter Unabia filed House Bill 4859, or “An Act Imposing the Payment of Entrance Fee to Residents of the Philippines that Patronize Casino,” which sought to amend Presidential Decree 1869. The bill, however, is still pending with the Committee on Games and Amusements.
Aside from casino entry fees, the think tank also wants to impose taxes on lotto and casino winnings because “there is unequal tax treatment of casinos lotteries and horseracing activities.”
“The proposed 20% final tax on lotto winnings is likewise supported for equity reasons considering that other forms of winnings are subject to the tax,” the center noted.
Several lawmakers, however, are against the plan, saying the proposal is like “killing the goose that lays the golden egg.”
Rep. Emil Ong, senior vice chairman of the House Committee on Appropriations, saw the proposal as a contravention of the Constitution, telling Manila Bulletin that most lottery bettors are from the low income sector who are hoping to taste “the comforts that the rich enjoy.”
The news outlet quoted Ong saying: “Taxation must be uniform and must be reasonable. Question: Is it reasonable to tax lotto winnings whose purposes and proceeds are used for charitable projects?”