Lawmakers: E-sabong bill to help revive economy

MANILA, Philippines — Desperate times call for desperate measures.

Key allies of President Duterte have expressed optimism that the House of Representatives’ approval of a bill imposing new taxes on electronic cockfighting – more popularly known as e-sabong – will help revive the country’s pandemic-hit economy.

Reps. Joey Salceda, chairman of the ways and means committee, and Sharon Garin of party-list Aambis-Owa, said the approval of House Bill 8065 on third and final reading will help resuscitate the economy, where a decline of 8.5 percent in GDP growth was seen this year.

Under Salceda’s proposal, the tax shall be five percent of gross revenues derived from offsite betting activities on locally licensed games and shall not be in lieu of taxes required by the local government units (LGUs) and regulatory fees and charges imposed by other agencies.

The proposal, according to him, is expected to raise at least P1.25 billion on its first full year of implementation, which would multiply the current Bureau of Internal Revenue (BIR) collection of P13.7 million from cockpits by more than 90 times.

“Simply put, it’s an untaxed activity where taxes will not harm the economy. The conclusion is obvious on the revenue aspect. Let’s make better use of the industry, while regulating it,” Salceda said.

For her part, Garin – who sits as vice chair of the Salceda committee – projected that this would also help the programs spearheaded by the national government to address the adverse impact of the COVID-19 pandemic.

She said the measure is a “much-needed shot in the arm for the national coffers and one that will lead to additional infrastructure, better social services and wider indigent health coverage for Filipinos.”

“As the Philippine economy contracted at a slower rate of 11.5 percent in the third quarter of 2020, we are prompted to tap into all possible means to expedite economic recovery,” Garin stressed.

She likewise underscored the need for government to “eliminate the ambiguity” in the current regulatory framework of digital and borderless activities such as e-sabong, which in the process will “promote accountability and transparency in the system.”

“We need to maximize the national government’s revenue-generating capacity by regulating these activities without overstepping on the powers of local government units and government gaming agencies,” Garin said.

Salceda and Garin clarified that LGUs will retain full regulatory and revenue collecting powers over in-premise games and betting.

Salceda’s bill empowers the BIR to accredit and inspect totalizators and other gambling devices used to verify tax assessments, while allowing the LGUs to maintain full authority to license the games under their jurisdiction.

Both legislators sponsored the measure on the plenary where it was eventually approved.

“The bill taxes an existing industry that is not yet being taxed, without causing any economic harm, as wagering is a demand inelastic non-essential,” Salceda, a former NEDA secretary-general, explained.

“The operations of e-sabong are authorized by local ordinances. Because of the digital shift, there are now electronic betting operations on such games. But the electronic aspect of it is a gray area, even though the airwaves is national property,” he pointed out.

“Because of this ambiguity, we are unable to levy national taxes on these activities. By clarifying this gray area in my proposal, we hope to raise multiples more in revenues than the BIR collection from cockpits of P13.7 million in 2019,” Salceda said.