EXECUTIVE ORDER NO. 194 June 16, 1987
RESTRUCTING THE TAXES OR AND PROVIDING FOR THE DISTRIBUTION OF RECEIPTS IN HORSE RACING, AND FOR OTHER PURPOSES
WHEREAS, there is a need to restructure the taxes on horse racing in order to maximize their revenue productivity and optimize their contribution to national economic recovery;
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order:
Sec. 1. Distribution of gross receipts. Any provision of existing general or special law to the contrary notwithstanding the total wager funds or gross receipts from the sale of betting tickets in horse races shall be apportioned as follows; eighty two (82%) per cent shall be distributed in the form of dividends among the holders of winning tickets; eight and one-half (8 1/2%) per cent shall be set aside as commission of the franchise grantee conducting the horse races eight and one-half (8 1/2%) per cent shall be set aside for the payment of stakes or prizes to winning horses; and one (1%) per cent shall set aside for the use of the Philippine Racing Commission: Provided, That in the case of gross receipts derived from the total sale of tickets for pari mutuel races, the one (1%) per cent government share shall be set aside for use of the Games and Amusements Board.
Sec. 2. Stamp tax on horse race tickets. On each horse race ticket, there shall be collected a documentary stamp tax of ten (P0.10) centavos: Provided, That if the cost of the ticket exceeds one (P1.00) peso, an additional tax of ten (P0.10) centavos on every one (P1.00) peso or fractional part thereof shall be collected: Provided, further, That in the case of double, forecast/quinella and trifecta bets, the tax shall be five (P0.05) centavos on every one (P1.00) pesos worth of ticket.
Sec. 3. Tax on Winning. Every person who wins in horse races shall pay a tax equivalent to ten (10%) 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 costs of the tickets: Provided, That in the case of winnings from double, forecast/quinella and trifecta bets, the tax shall be four (4%) per cent. In the case of owners of winning race horses, the tax shall be ten (10) per cent of the prizes.
The tax herein prescribed shall be deducted from the "dividends" corresponding to each winning ticket or the "prize" of each winning race horse owner and withheld by the operator, manager, or person in charge of the horse races before paying the dividends or prizes to the persons entitles thereto.
The operator, manager, or person in charge of horse races shall, within twenty (20) days from the date the tax was deducted and withheld in accordance with the second paragraph hereof, file a true and correct return with the Commissioner of the Bureau of Internal Revenue in the manner or form to be prescribed by the Secretary of Finance, and pay within the same period the total amount of tax so deducted and withheld.
Sec. 4. The taxes herein prescribed shall be subject to review by the Secretary of Finance after eighteen (18) months from the date of effectivity and implementation of this Executive Order. If, after review, the level of government revenue from horse racing is equal to or higher than that corresponding to the eighteen (18) months immediately preceding the effectivity of this Executive Order, the tax structure for horse racing herein prescribed shall become permanent, otherwise, the taxes imposed under the National Internal Revenue Code, as amended, and the distribution of gross receipts from the sale of betting tickets in horse races under Republic Act Nos. 6631 and 6632 shall be automatically restored.
Sec. 5. The Secretary of Finance shall promulgate the necessary rules and regulations to implement this Executive Order.
Sec. 6. Subject to the provisions of Section 4 hereof, Sections 203 and 229 of the National Internal Revenue Code, as amended; and all laws, orders, issuances, and rules and regulations or parts thereof inconsistent with this Executive Order are hereby repealed or modified accordingly.
Sec. 7. This Executive Order shall take effect immediately.
Done in the City of Manila, this 16th day of June, in the year of our Lord, nineteen hundred and eighty-seven.
The Lawphil Project - Arellano Law Foundation
