PCSO lottery taxes guide - is Lotto actually tax free?

Thursday 05 April, 2018


Pcso Lottery taxes - how to?

There was a long debate in Philippines about introducing new taxes to the Pcso lottery games.

What we can read about lottery taxes on the official PCSO site? To get a Sweepstake prize we are required to have community tax certificate when visiting the office. The site says that all Sweepstakes prizes paid are tax-free (due to Section 4 of R.A. 1169).

We couldn't find any information about regular Lotto prizes, so started to investigate different sources on the internet, mostly mass media based.

For very long time lottery wins in Lotto and Sweepstakes were tax-exempt but government was pushing to reform the system in 2017. It would happen if House Bill 4774 was approved. At as we are writing this we know it happened.

PCSO oposed this new tax. Chairman in february, 2017 rejected the calls to impose new taxes on lottery winnings, because all the Lotto winnings are already pre-taxed. The main disadvantage of new taxes is discouraging people from playing - because what is the point when you need to give back 20% of your prize?

It is very painful because all lottery games have already taxes - for example when buying Php 20 Lotto ticket you pay Php 6 for charity. Another Php 1 is paid as a tax.

Is pcso lotto tax free?

Starting January 1st, 2018 the lottery winnings of at least 10,000 PHP are taxed additional 20 percent. This tax already has made significant change in remittances to the treasury. As PCSO stated in March, 2018, it doubled to PHP 1 billion a month. Statistics show that player demand was not affected by the changes. Few small towns even rised their sales by 3 percent. Now the office is considering different marketing strategies to ensure people of good causes being supported by ticket sales. This may attract more buyers of the lottery products in Philippines.

20 percent PCSO tax is a apart of a big reform of tariff system in Philippines, and as government states - is needed to provide stable economic growth.