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BIR Clarifies Taxability of Electronic Sabong Operations

On 11 March 2022, the Bureau of Internal Revenue (“BIR”) clarified the taxability of Electronic Sabong (“e-Sabong”) Operations through Revenue Memorandum Circular No. 25-2022 (“RMC 25-2022”). 

Consistent with tax laws applicable to business entities and establishments, the BIR enumerated the following policies and guidelines that shall be observed by the e-Sabong entities:

  1. Registration of the business at the Revenue District Office (“RDO”) having jurisdiction over the principal place of business/head office of the e-Sabong entity.
  2. Filing of applicable tax returns and payment of correct internal revenue taxes within the deadlines prescribed by law. E-Sabong entities must also submit information returns and other appropriate tax compliance reports in accordance with existing revenue rules and regulations.
  3. Keeping of book of accounts and other business/ accounting records within the prescribed time prescribed by law. These shall be made available anytime for inspection and verification by authorized Revenue Officer/s for the purpose of ascertaining compliance with existing tax rules and regulations.
  4. Withholding of the required creditable/ expanded withholding tax, final tax on compensation of employees and other withholding taxes as wells as the timely remittance thereof.

RMC 25-2022 also summarized the tax treatment of the income from the e-Sabong operations, as follows:

Type of Income

Tax Treatment

Gaming income from e-Sabong Operation by an e-Sabong Operator

• Subject to 5% franchise tax, in lieu of all internal revenue taxes except VAT or percentage tax, depending on the threshold. The franchise tax shall be remitted by the e-Sabong Operator directly to the BlR.


• In the event that the e-Sabong Operator has contracted with the Philippine Amusement and Gaming Corporation (“PAGCOR”) for the provision of goods and services in connection with PAGCOR’s gaming operations, then, such provision of goods and services to PAGCOR is subject to VAT at zero-rate.

Service income and other income from e-Sabong Operation by an e-sabong Operator

• Subject to regular income tax, value-added tax or percentage tax depending on the threshold, withholding tax and other taxes, as may be deemed appropriate.

Commission lncome received by a Third-Party e-sabong Master Agent/Agent or Third-Party e-sabong Promoter/Coordinator

• Subject to regular income tax, value-added tax or percentage tax depending on the threshold, withholding tax and other taxes, as may be deemed appropriate


• The e-Sabong Operator shall withhold and remit the creditable withholding taxes of 5%/10% for individual payees and 10%/15% for non-individual payees

lncome received by the Cockpit Owner/Operator for the use of the cockpit arenas/venues from the e-Sabong Operator

• Subject to regular income tax, value-added tax or percentage tax depending on the threshold, withholding tax and other taxes, as may be deemed appropriate


• The e-sabong Operator shall withhold and remit the 5% creditable withholding taxes

Income received by a Third Party Off-Cockpit Betting Station (“OCBS”) Host from the OCBS or by a Third-Party Game Cock Owner from the e-sabong Operator

• Subject to regular income tax, value-added tax or percentage tax depending on the threshold, withholding tax and other taxes, as may be deemed appropriate


• The e-sabong Operator shall withhold and remit the 2% creditable withholding taxes

The BIR also clarified that other income derived or received by any person/s or entity/ies in relation to the operation/s of e-sabong not included in the above-mentioned enumeration shall be subject to appropriate taxes under the National lnternal Revenue Code of 1997, as amended.

Finally, in addition to the penalties and sanctions imposed by the appropriate regulatory government agencies, the income derived by unauthorized e-Sabong Operators and the entities providing ancillary services to its unauthorized e-Sabong operations shall not be covered under the fiscal regime as provided for in the PAGCOR charter but rather subject to appropriate taxes and penalties as provided under the NIRC, as amended.
The full text of RMC 25-2022 may be accessed here.