Philippines provides guidance on jackpot tax as gaming sector expands

(AsiaGameHub) –   The Philippines’ Bureau of Internal Revenue (BIR) has released a directive affirming that jackpot prizes are subject to a 20% withholding tax.

The BIR indicated that it provided this clarification after receiving multiple queries regarding the interpretation of ‘winnings’ under the national tax code, as covered by Philippine News Agency reports.

According to the tax code, both fixed and progressive jackpots are classified as ‘winnings’, requiring operators to withhold 20% of the prize before deducting service charges and administrative fees.

This rate increases to 25% for non-residents who are ‘not engaged in trade or business’ within the Philippines.

The BIR stated that the performance of the Philippines’ gambling sector has resulted in a greater availability of high-value jackpot prizes for players.

The approach taken by the Philippines diverges from that of the majority of other Asian markets. 

Macau, Singapore and Japan all have no taxes on wagers, instead placing the responsibility on the operator. 

India is one of the few other markets in the region where a tax is levied on player wagers, which includes jackpots.

This initiative also introduces a risk of fraud concerning ‘advance tax scams’ that have been observed in the country.

Nevertheless, the economic impact could be substantial for the country, as the sector continues to expand, with data from the Philippine Amusement and Gaming Corporation (PAGCOR) indicating that revenue from the country’s gaming sector grew over 6% to P396.1bn (£4.87bn) in 2025, primarily driven by a 30% increase in the electronic gaming sector.

“Given these developments, there is a critical need to clarify the tax treatment of jackpot prizes to ensure consistent application of existing laws, promote equity and uniformity in taxation, and protect government revenue, without altering the scope of the law,” stated the BIR.

PAGCOR ramps up player protection

In light of this growth, which was somewhat moderated in the first quarter of 2026 due to the impact of tensions in the Middle East, PAGCOR has moved to introduce new regulations for market protection.

These changes include mandatory accreditation for B2B suppliers, restrictions on the locations and timing of advertising by gambling companies, and limits on cashback offers and cash rebates related to player losses and turnover, respectively.

More recently, the regulator has also launched a new 24-hour problem gambling helpline in collaboration with the Seagull Flock Organisation.

Users of this service will have access to trained counsellors who will provide support for problem gambling and referrals for further treatment.

Alejandro Tengco, Chair and Chief Executive Officer of PAGCOR, noted that the helpline, which will initially be staffed by 12 counsellors, reflects the regulator’s commitment to responsible gambling.

He stated: ‘PAGCOR recognizes that for many, gaming is simply a form of leisure and recreation. However, for some, what may begin as entertainment can gradually lead to financial strain and ruin, emotional distress, damaged relationships, and isolation.’

This move mirrors similar services available in markets such as the UK, through the National Gambling Helpline run by GamCare, and the National Problem Gambling Helpline Network in the US.