RMC No. 25-2022

RMC No. 25-2022 clarifies the taxability of PAGCOR-regulated Electronic Sabong (e-Sabong) operations. e-Sabong entities must register at the RDO over their principal place of business (or residence, for individuals), pay the registration fee to an Authorized Agent Bank, display their BIR Certificate of Registration, file and pay correct taxes on time, keep books available for inspection, and withhold and remit required taxes. Gaming income from e-Sabong operations is subject to a 5% Franchise Tax in lieu of all internal revenue taxes except VAT or Percentage Tax (depending on the threshold), remitted directly to the BIR, and is separate and distinct from PAGCOR's own 5% franchise tax; provision of goods and services to PAGCOR is VAT zero-rated. Other income streams — the operator's service/other income not deriving from the PAGCOR e-Sabong license, commissions of third-party Master Agents/Agents/Promoters/Coordinators, cockpit arena/venue fees, and OCBS host/game cock owner income — are subject to regular Income Tax, VAT or Percentage Tax depending on the threshold, and withholding tax, with the e-Sabong operator withholding 5%/10% (individual payees) or 10%/15% (non-individual payees) on commissions, 5% on cockpit owner/operator income, and 2% on OCBS host/game cock owner income. Unauthorized e-Sabong operators and entities providing ancillary services to unauthorized operations are not covered by the PAGCOR charter fiscal regime and are subject to appropriate taxes and penalties under the National Internal Revenue Code of 1997, as amended.