STL operators remiss in paying P2.9B in taxes from 2006 to 2015 –PCSO

Operators of the Small Town Lottery (STL) have been remiss in the payment of P2.9 billion in taxes for close to a decade, Philippine Charity Sweepstakes Office (PCSO) General Manager Jose Ferdinand Rojas admitted Monday.

 

At the hearing of House committee on games and amusements, Rojas said the STL operators’ failure to collect the 10-percent documentary stamps tax (DST) from the game was discovered during a review of its operations from 2006 to 2015.

 

His statement was supported by a Bureau of Internal Revenue (BIR) representative, who said the agency has not collected any documentary stamps tax from those running STL outlets since their operations began in 2006.

 

Just like other authorized betting games such as jai alai, horse racing and lotto, the BIR said STL operations are covered by the National Internal Revenue Code mandating the payment of a 10-centavo DST for every P1 bet. 

 

Despite a 2008 Supreme Court ruling putting the numbers game under the BIR’s scope, the agency noted that PCSO has so far not done anything to compel STL operators to pay the requisite DST.

 

PCSO assistant general manager for gaming Conrado Zabella’s explanation that the DST has not been collected since the STL is in its “experimental phase” drew the ire of several lawmakers, who noted that nearly a decade has passed since the numbers game was established in a bid to combat jueteng.

 

Sought for comment after the hearing, Rojas described the STL operators’ failure to pay taxes as an “oversight” which he vowed to rectify. “We will confer with the BIR,” he said.

 

Committee chair and Cavite Rep. Elpidio Barzaga Jr. said STL operators could be liable for at least P2.9 billion in back taxes, excluding fees and penalties over their failure to pay DST for the past nine years.

 

He hinted at the possibility that the uncollected taxes from the numbers game could even be bigger than what PCSO stated since the Commission on Audit has not audited its operations.

 

Rojas, however, said the COA has been auditing the STL’s operations on a per province basis.

 

While STL operators should be penalized for not paying taxes, Barzaga said PCSO officials are similarly at fault for letting the operators off the hook.

 

“Even if it's experimental, it does not excuse them from paying DST.They can't invoke ignorance of the law because everybody else would do the same,” he said.

 

The lawmaker said the government could be raking in more revenues from STL than what the PCSO has reported if only the agency had been diligent about the use of official “papelitos” for recording bets.  — ELR, GMA News