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Race Tax Bill Passes Lower House

Race tax bill passes Lower House

By Jenny Ortuoste for Manila Standard-Today, 20 May 2009, Wednesday

 (Banner story on the Sports page. Last two paragraphs below omitted from published story due to space constraints.)

“It’s a landmark day for the racing industry.”

This was the comment of Palawan Rep. Abraham Mitra yesterday when the House of Representatives Ways and Means and Games and Amusements Committees approved House Bill 4176 that he authored.

The law rationalizes direct taxes on exotic bets which at present make Philippine horseracing, taxed at 20%, among the highest-taxed even among its counterparts abroad. With other deductions such as those for track take and prize money, the total tax rate for exotic bets soars to about 35%.

Exotic bets include the Winner-Take-All, Pick 6, Pick 5, superfecta, supersix, pentafecta, quartet, and triple trifecta. Direct taxes on these are the documentary stamp tax at 10% and the tax on winnings at 10%.

Cong. Mitra’s bill, incorporating policy suggestions from the Philippine Racing Commission, will cut the taxes on exotic bets by half to mirror the present tax rate on special bets – daily double, forecast, double quinella, trifecta, daily double plus one, extra double, and win – which are taxed 5% for DST and 4% for tax on winnings.

In his presentation before the two House committees, Philracom chairman lawyer Jose Ferdinand Rojas II pointed out that every time taxes on racing were reduced, industry gross sales and government revenue increased. “When Executive Order 194 was passed in 1987,” said Rojas, “reducing direct taxes on special bets, gross sales reached a billion pesos for the first  time the following year. A positive impact was felt immediately.”

Racetax_slide_18may09

Slide from the Philracom presentation showing the tax structure that passed muster (highlighted in yellow).

He added that paradoxically, when taxes are increased, revenues plunged. This occurred several times – when Presidential Decree 1947 increased the DST to 10%; in 1984 when PD 1959 doubled the DST to 20%, causing racing operations to cease for a time due to the prohibitive tax burden; and in 1993 when Republic Act 7660 increased the DST from 5% to 10% on special bets.

According to House Games and Amusements Committee chairman and Manila congressman Amado Bagatsing, the bill “will greatly benefit the betting public because more funds will be available for payouts. This in turn would weaken illegal bookie operations because they would not be able to match the higher payouts that the racing clubs will give under this scheme.”

Tarlac congressman Jeci Lapus agreed, saying that “this will be a big boost to the development of the horseracing and breeding industry. Increased sales will be an incentive for more players to invest in the sport by way of horses, infrastructure, and off-track betting stations.”

Cong. Mitra expressed his pleasure on the support his bill received from his colleagues in the Lower House, saying, “We expect this to encourage wider public participation and an increase in probable stakeholders, leading to jobs generation for trainers, jockeys, grooms, and other workers in the industry, and other economic benefits.”

The bill still has to undergo the scrutiny of the Senate before it passes into law.   ***

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Go Army Out of Race

Go Army Out of Race

By Jenny Ortuoste for Manila Standard-Today, 12 May 2009, Tuesday

(Back sports page; last two paragraphs below omitted from published version)

 It’s a wide-open competition for Triple Crown I honors on May 17 at Santa Ana Park in Naic, Cavite, with the withdrawal of classy chestnut colt Go Army from the first leg of the most prestigious racing event for 3YO local thoroughbreds.

Go Army (Mr. Sutter – J’Approve), bred by his owner Herminio S. Esguerra at his own Herma Farms and Stud in Lipa, Batangas, earned top honors during his juvenile campaign last year.

Despite a string of setbacks this year that marred his perfect 2YO record, Go Army is still one of the best-regarded 3YO horses in the country and was considered as one of the favourites going into this summer’s Philippine Racing Commission-sponsored Triple Crown series.

Reliable sources confirmed that Go Army connections submitted the requisite scratching form at the Philracom office today. The reason for the scratching was given as “bruised sole”, a catch-all phrase that connotes an injury, soreness, or other condition that prevents a horse from running in optimum condition.

 Sources revealed that Go Army incurred an injury in one leg after running in a tune-up race last May 3 at Santa Ana Park, which he won. This was during the same racing week that saw thirteen horses injured at the track, with four of them eventually breaking down and having to be humanely destroyed. The poor track condition was blamed for Go Army’s stressed leg.

 Veteran jockey Antonio Alcasid Jr., who steered Go Army to victory in the tune-up race and was declared to partner him again in the Triple Crown I, will be riding Go Army’s stablemate Go Navy instead in that race.

 Two other Philracom stakes races will also be held on May 17 at Santa Ana Park. The Hopeful I, the auxiliary race to the Triple Crown, is less one competitor with the scratching of Key Joshua. The Bonifacio Mantilla-owned colt went lame after a workout last week.

 In the Emerald I, the final lineup includes four horses – Tony de Ubago’s Chariot of Fire, Aristeo Puyat’s Cutting Edge, Lorraine Uy Wi’s Don Enrico, and Roberto Yutadco’s Speed Almighty. ***

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