Increasing The Rates Of Tax On Winnings In Jai-Alai And Horse-Racing And The Share Of The Government From The Sweepstakes Total Prize Fund

MALACAÑANG
M a n i l a

PRESIDENTIAL DECREE No. 1157

INCREASING THE RATES OF TAX ON WINNINGS IN JAI-ALAI AND HORSE-RACING AND THE SHARE OF THE GOVERNMENT FROM THE SWEEPSTAKES TOTAL PRIZE FUND

WHEREAS, the rising need for additional revenues for accelerated national development has rendered it imperative for the Government to tap sources from which this might equitably be derived;

WHEREAS, the primary justification for the existence and maintenance of gambling establishments is the allocation of a portion of the income derived therefrom to worthwhile projects such as charitable activities and the upkeep of the Government;

WHEREAS, aside from its revenue potential, moral and economic reasons justify the imposition of higher taxes on legalized gambling;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution of the Philippines, do hereby order and decree that:

Section 1. Section 260-A of the National Internal Revenue Code, as amended, is hereby further amended to read as follows:

"Sec. 260-A. Tax on Winnings....

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Summary of Presidential Decree No. 1157

Tax on Winnings from Jai-Alai and Horse Racing (Section 1):
- Every person who wins in horse races or jai-alai shall pay a tax equivalent to 10% of their winnings or "dividends".
- The tax is based on the actual amount paid for every winning ticket after deducting the cost of the ticket.
- The tax shall be deducted from the "dividends" corresponding to each winning ticket and withheld by the operator, manager, or person in charge before paying the "dividends" to the winner.
- The same tax shall be collected from owners of winning race horses at the same time and in the same manner.

Tax on Sweepstakes Prize Fund (Section 2):
- The Office shall hold charity horse race sweepstakes under regulations promulgated by the Board in accordance with Republic Act No. 309.
- If holding a sweepstakes race to determine prizes is impossible due to war, public calamity, or other unforeseen or fortuitous event, or if there is no sufficient number of horses to determine the major prizes, the Board of Directors may determine the procedure to be followed in the distribution of prizes in the most just, equitable, and expeditious manner.
- The horse races and the sale of tickets in the sweepstakes shall be exempt from all taxes, except that each ticket shall bear a 12-centavo internal revenue stamp.
- From the total prize fund, an amount equivalent to 5% shall be deducted and paid to the Bureau of Internal Revenue not later than 10 days after each sweepstakes in lieu of the income tax previously collected from sweepstakes prize winners.
- Any prizes paid out from the resulting prize fund, after the 5% deduction, shall be exempt from income tax.
- The tickets shall be printed by the government and shall be considered government securities for the purposes of penalizing forgery or alteration.

Effective Date (Section 3):
- This Decree shall take effect immediately.