House bill seeks tax on lottery winnings

MANILA, Philippines - Winnings from lotto, sweepstakes and other lotteries of the Philippine Charity Sweepstakes Office (PCSO) would no longer be tax-free, if two Mindanao lawmakers would have their way.

Cagayan de Oro City Rep. Rufus Rodriguez and his brother Maximo, representative of the party-list group Abante Mindanao, have filed House Bill 4832 seeking to tax winnings from PCSO lotteries.

They said taxes on lottery prizes would be a big boost to the government coffers.

They said in the case of a balikbayan who recently won the biggest lottery pot of P741 million, “the US government received over P200 million in tax revenues because the winner is a US citizen.”

“That P200 million could have instead gone to the Philippine government if only lotto winnings are taxed here,” the lawmakers added.

Under the proposed measure, lotto winnings, except those amounting to P10,000 or less, would be treated like interest on bank deposits and would be levied a final tax of 20 percent.

Meanwhile, senators Ralph Recto and Teofisto Guingona III proposed that the charity fund of the PCSO be diverted entirely for universal health care coverage to prevent a repeat of the fund misuse that allegedly occurred during the past administration.

Recto and Guingona, both allies of President Aquino in the Liberal Party, are in favor of putting revenues under the administration of the Philippine Health Insurance Corp. (PhilHealth) for the National Health Insurance Program (NHIP).

According to Recto, the Aquino health agenda aims to attain universal health care by giving all Filipinos, especially the poor, access to health care services.

Recto, chairman of the Senate ways and means committee, said the PCSO charter should be amended.

“The PCSO has recently been mired in controversies over the alleged misuse of its charity fund. Billions of pesos are held as discretionary funds in the PCSO and disbursed by its board without specific standards on its use and without clear accountability,” he stressed.

Recto proposed that the charity fund be put entirely under the NHIP and administered by PhilHealth; bee used for NHIP but the existing revenue share of the local government units and other government agencies in the PCSO charity fund shall be retained; and that only 70 percent of the charity fund be used for the NHIP.

“The public is left in the dark as to the magnitude and allocation of the PCSO funds. There is no transparency in the use of the fund because it does not go through the usual budget scrutiny as it is considered off-budget item, and, therefore, not included in the congressional public hearings on the General Appropriations bill,” the senator added.

Recto noted that instead of the PCSO funneling the funds to its government hospital beneficiaries, the agency’s fund would now be directly infused to PhilHealth that will allow indigents to seek treatment in public and private hospitals.

Guingona said he is in favor of Recto’s proposal rather than directing all PCSO revenues to the national treasury. – With Christina Mendez