Unauthorized collection of prize fund taxes reaches P4 billion, says Tulfo

TULFO LEADS PROBE ON PCSO PRIZE TAX FUND ISSUE: Sen. Raffy Tulfo presides over the public inquiry of the Committee on Games and Amusement on the status of the prize fund tax remitted by the Philippine Charity Sweepstakes Office to the Bureau of Internal Revenue. Senate PRIB / Voltaire F. Domingo

MANILA, Philippines — There is a P4-billion unauthorized collection of prize fund taxes, Senator Raffy Tulfo said on Monday.

The payment of prize fund tax has been repealed with the implementation of the Tax Reform for Acceleration and Inclusion (Train) law. Instead, a final tax of 20 percent is imposed on prizes and winnings of over P10,000 from the Philippine Charity Sweepstakes and Lotto.

During the Senate committee on games and amusement hearing, Tulfo said that the Philippine Charity Sweepstakes Office (PCSO) transmitted nearly P3-billion final tax and P4-billion prize fund tax to the Bureau of Internal Revenue (BIR) from 2018 to 2021.

“Paano po nangyari ito, na wala sa PCSO at sa BIR ang nagtanong or umalma? Hindi naman pwedeng sabihin na hindi ninyo alam na may binago ang Train law dahil nagbayad kayo ng bagong 20 percent na final tax na nakalagay sa Train Law. Pero bakit ‘yung bahagi na hindi na itutuloy ‘yung 5-percent prize fund tax ay hindi ninyo napansin?” Tulfo lamented.

(How did this happen that neither the PCSO nor BIR questioned or raised something? You cannot say that you do not know that something has changed with the Train law because you paid a 20-percent final tax. But, the part that was repealed, the payment of the 5-percent prize fund tax, still continued?)

“Masyadong malaki itong halaga na ito para sabihin na ‘nagkamali lang po.’ Ano ang dahilan bakit nagtuloy-tuloy ang pagbayad ng prize fund tax?” he added.

(This amount is huge to say that you made a mistake. What is the reason why the payment of the prize fund tax continued?)

According to the PCSO, they are collecting the prize fund tax because the BIR collects it from them.

The BIR, for its part, told the PCSO to file a tax refund in accordance with Section 229 of the Tax Code in order to revert the prize fund tax which the PCSO plans to give to small town lottery operators (STL).

Tulfo suggested that the rebated prize fund tax be allocated for charity instead in accordance with its mandate as a charitable institution.

Unliquidated 2% printing fee

Tulfo had a similar sentiment on the P568-million printing fee collected from STL operators which according to him are for supplies that never arrived to STLs.

When asked where the printing fee goes, PCSO Accounting and Budget Department Manager Cris Gregorio  responded that it is with the agency.

Senator Tulfo suggests for it to be donated.

“‘Yung perang ‘yan — tutal charitable institution po kayo — ipamigay na lang po natin sa charity. Nandiyan po ‘yang Philippine Children’s Hospital na naghihingalo. Nandiyan po ‘yung East Avenue Hospital. Doon n’yo po siguro ilagay ‘yung funds na ‘yan,” he said.

(That money —since you are a charitable institution —let us give it to charity. The Philippine Children’s Hospital and the East Avenue Hospital are there. Maybe put the funds there.)

PCSO chairman Junie Cua replied: “We’ll look into that suggestion, we will have to consider certain legal considerations if that is allowed.”

The PCSO said that all excess funds are allotted to charity in accordance with their charter.

— MJ Soriano, INQUIRER.net trainee

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JPV