State-run Philippine Charity Sweepstakes Office said Monday it will settle with the Bureau Internal Revenue the unpaid documentary stamp tax on small town lottery operations.
PCSO general manager Jose Ferdinand Rojas II said the agency was willing to end the dispute with BIR and comply with the requirements of the tax-collecting agency.
“The PCSO will coordinate and will clarify and comply with the BIR,” Rojas II said.
Rojas stressed the present board of the PCSO initiated and implemented the DST with the small town lottery operators in 2015.
“When the board came in 2010 there was no DST for STL. There was no BIR on that matter. Nevertheless because of the intention to enhance and improve all PCSO gaming activities which include STL, the present board put in place the DST,” he added.
The BIR during a recent congressional hearing estimated the unsettled DST of PCSO at close to P3 billion.
BIR Commissioner Kim Jacinto-Henares earlier said the PCSO was required to pay the DST on the sale of lottery tickets, based on the final and executory ruling of the Supreme Court.
Rojas had said his office had not received any “adverse opinion” on the DST from the BIR or the Commission on Audit.
Computations made by PCSO showed the unpaid DST of the anti-jueteng gaming operation in 2013 and 2014 alone reached P879.40 million, representing the 10-percent levy on betting tickets.
Under the National Internal Revenue Code, a P0.10 documentary stamp tax is charged for every P1 bet in jai alai, horse race, lotto, or other authorized numbers games, like STL.
PCSO said it planned to expand the operations of STL program to other cities and provinces to increase the revenue of the agency.
The PCSO board said the ticket sales of STL had the capacity for further expansion, as they merely accounted for about 12 percent of the charity office’s annual gaming income. Lotto is the main source of PCSO’s revenues.
The PCSO board in 2014 passed a resolution expanding STL operations nationwide on the recommendations of its gaming, product development and marketing sector and branch operations.
STL sales account for just about 12 percent of PCSO’s revenues from games, with lotto still the number one source of revenues.
But PCSO chairman Erineo Maliksi wanted to revoke the authority of all STL operators in the country and give it exclusively to a maximum of two nationwide.
Maliksi had proposed “to amend pertinent laws to abolish PCSO’s mandatory contributions to various government agencies.”
There are 15 laws that mandate PCSO to share a small portion of its revenues to government agencies.
These are Commission on Higher Education, National Shelter Program, Crop Insurance Program, Government Information System on Migration under the Department of Foreign Affairs and Quirino Memorial Medical Center.
PCSO also contributes to the National Commission on Indigenous Peoples for the Ancestral Domain Fund, Museum Endowment Fund, Dangerous Drug Board and Standby Fund for the financial requirement to combat Severe Acute Respiratory Syndrome.
The agency contributes to the Philippine Drug Enforcement Agency, the fight again avian influenza or bird flu virus and the lotto share of local government units.
The law created PCSO to generate funds for health programs and charities through sweepstakes, races, lotteries and other similar activities.
PCSO had total assets of P19.37 billion based on its 2014 unaudited financial statement.
Total retail receipts amounted to P32.32 billion in 2014, with sweepstakes sales amounting to P50 million; Keno, P2.75 billion; and lotto sales, P29.52 billion.
About 55 percent of the net receipts are allocated for prize fund, 30 percent for charity fund and 15 percent for operating fund.