M a n i l a



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. Every person who wins in horse races or Jai-Alai shall pay a tax equivalent to ten per cent 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 the ticket. The tax herein prescribed shall be deducted from the "dividends corresponding to each winning ticket and withheld by the operator, manager, or person in charge of the horse-races or Jai-Alai before paying the "dividends" to the person entitled thereto. The same tax shall be collected from owners of winning race horses at the same time and in the same manner above"

Section 2. Section 4 of the Republic Act Numbered 1169 is hereby amended to read as follows:

"Sec. 4. Holding of sweepstakes. The Office shall hold charity horse race sweepstakes under such regulations as shall be promulgated by the Board in accordance with Republic Act Numbered 309: Provided, however, That when the holding of a sweepstakes race to determine prizes is impossible due to war, public calamity, or other unforeseen or fortuitous event, or when 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 expenditious manner. The horse races and the sale of tickets in the said sweepstakes shall be exempt from all taxes, except that each ticket shall bear a twelve-centavo internal revenue stamp and that from the total prize funds as provided herein from the proceeds of the sale of tickets, there shall be deducted an amount equivalent to five per centum of such total price, which shall be paid to the Bureau of Internal Revenue not later than ten days after each sweepstakes in lieu of the income tax heretofore collected from sweepstakes prize winners: Provided, however, That any prizes that may be paid out from the resulting prize fund, after said five per centum has been deducted, 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."

Section 3. Effective Date. This Decree shall take effect immediately.

DONE IN THE CITY OF MANILA, this 3rd day of June, in the Year of Our Lord, Nineteen Hundred and Seventy-Seven.

The Lawphil Project - Arellano Law Foundation