A panel in the House of Representatives conducting an inquiry into Small Town Lottery operations across the country has approved a move to review and “rationalize” the rules and regulations governing this numbers game.
Camarines Sur Rep. and panel member LRay Villafuerte welcomed the move of the House committee on games and amusements which voted to conduct a formal study on the matter, particularly in light of numerous complaints against Accredited Agent Corporations or STL operators who have failed to deliver their minimum monthly sales remittances as originally agreed upon with the Philippine Charity Sweepstakes Office.
Minority leader and Quezon Rep. Danilo Danilo Suarez made the motion at a congressional hearing, which prompted the House committee on games and amusements who voted to further study and “rationalize” the STL’s implementing rules and regulations.
Prior to Suarez’s motion, Villafuerte presented a comprehensive report detailing the blatant violations committed by Evenchance Gaming Corp., the AAC in his province.
“I am making it a motion for the chair to conduct a formal study, together with the PCSO and other agencies and the members of the committee, to come up with the correct PMRR [Presumptive Monthly Revenue Receipts] and …a partner amendment to the IRR of STL. I so move, Mr. Chair,” said Suarez.
Suarez authored a House resolution seeking a congressional investigation into gambling operations in the country.
The PMRR refers to the minimum monthly sales remittances that the AACs or STL operators have committed to turn over to the PCSO. Under the STL IRR, the failure to submit their respective monthly PMMRs on a regular basis is a ground for the suspension or revocation of the permits of the delinquent AACs.
In his presentation at the hearing, Villafuerte said the government continues to be defrauded of revenues from STL operations since Jan. 1 as a result of the failure by the PCSO to collect higher documentary stamp taxes from these numbers game as provided under the Tax Reform for Acceleration and Inclusion Act law.
Villafuerte said that under the STL-IRR, a 10 percent Documentary Stamp Tax of the gross sales from STL operations should be charged against the PCSO’s Charity Fund, as provided under the law.
But under the TRAIN, the DST has been doubled, with the Bureau of Internal Revenue issuing Revenue Regulations 04-2018 stating that the DST should now be 20 percent including those from the gross sales on jai-alai bets, horse race tickets, lotto “or other authorized number games,” Villafuerte pointed out.
Greg Buhain, who heads the BIR’s Regular Large Taxpayers Audit Division III, confirmed that the bureau has already notified the PCSO about the new DST rates that should be collected from the gross sales of STL operations under the TRAIN.
Villafuerte noted that under Section 48 of the STL-IRR, the IRR as well as the Agency Agreement between the PCSO and the STL operator “may be modified amended or supplemented as may be necessary, upon recommendation of the SMG (STL Monitoring Group), and approval of the PCSO Board.”
Thus, Villafuerte said, the PCSO should have long modified their Agency Agreements with STL operators to reflect the new DST provision under the TRAIN law, which has been in effect since January 1.
Villafuerte said the failure of the PCSO to collect the correct amount of DSTs from STL operators is just the tip of the iceberg as the charity agency has long been committing an even graver infraction of ignoring mounting complaints about STL operations being used as jueteng fronts and allowing operators of the numbers game to recklessly violate provisions of the STL-IRR.
He cited the failure by Evenchance to turn over to the PCSO an accumulated P1.046 billion from the period of March to November 2017 alone. Villafuerte said the amount represents the shortfall from the formula for the PPMR set by the PCSO itself as Evenchance had only remitted P139.79 million for the same period.