BIR, PAGCOR fail to withhold taxes from e-sabong winnings - Tolentino

MANILA - Senator Francis 'Tol' N. Tolentino called out various agencies over the supposed failure of the government to withhold taxes from e-sabong winnings.

Tolentino stressed that the Bureau of Internal Revenue (BIR) and the Philippine Amusement and Gaming Corporation (PAGCOR) failed to withheld the 20-percent tax from the winning profits of online sabong operations since the virtual cockfighting industry began sometime during the second quarter of 2020, unlike those being collected from other number games like sweepstakes, horse racing, and lotto.

Tolentino noted that government earnings from e-sabong operations only came from the regulatory fee being collected by PAGCOR from license operators every match.

A regulatory fee tantamount to only P12,500 per match or sultada.

"So ang lumalabas ngayon, walang buwis pa na tinatanggap ang pamahalaan buhat sa e-sabong... unlike, pakinggan mo BIR, sweepstakes winnings. Lotto--binabawas agad yun (kapag) nanalo ka, diba? Horse racing, may bawas yun. Sa e-sabong wala pa, bakit ganun?" Tolentino said during Monday's inquiry in the Senate Committee on Public Order and Dangerous Drugs in connection with the mysterious disappearances of 34 cockfighting aficionados.

Gambling tycoon Charlie 'Atong' Ang during the said Senate probe disclosed that his e-sabong firm, Pitmasters Live has been remitting to PAGCOR just barely P112.5-million worth of regulator fees every 30 days, despite admitting earlier that the said company earns roughly P3-billion monthly.

Under the National Internal Revenue Code, legal gambling entities are supposed to remit to the national government a big chunk of their earnings

"We are in a state of disarray by letting go of a big amount that should have gone to the coffers of government and used as 'ayuda' for drivers, farmers and fisherfolks," Tolentino added.

Atty. Sixto Dy Jr., chief-of-staff of the BIR's Office of the Deputy Commissioner for Operations to members of the Senate panel that winnings from e-sabong above P10,000 are subjected to 20-percent withholding tax.

Tolentino explained that the complexity in the dynamics surrounding online sabong industry should be blamed once and for all, to the Department of Justice (DOJ) and the Office of the Solicitor General's (SolGen) erroneous interpretations of Republic Act No. 9487--the New PAGCOR Charter--and has enabled the questionable authority of the country's gambling regulatory agency in regulating e-sabong.