TLDR
- The Philippine Bureau of Internal Revenue confirmed that casino and gambling jackpot prizes are subject to at least 20% final withholding tax for resident taxpayers
- Nonresident aliens not engaged in trade or business in the Philippines face a higher 25% tax rate on winnings
- The tax is calculated on gross winnings with no deductions allowed for service charges, fees, or commissions
- Gaming operators are designated as withholding agents and face penalties including surcharges and criminal action for noncompliance
- The guidance applies to both licensed and unlicensed operators and covers cash prizes, progressive jackpots, and table game winnings
The Philippine Bureau of Internal Revenue has confirmed that jackpot prizes from casinos and gambling activities are subject to a minimum 20% final withholding tax. The agency published the guidance through Revenue Memorandum Circular No. 57-2026 on Tuesday, May 26.
Internal Revenue Commissioner Charlito Martin R. Mendoza issued the circular to clarify the tax treatment of gambling winnings. The move comes as the Philippine gaming industry continues to expand under the oversight of the Philippine Amusement and Gaming Corp.
The BIR said the growth in high-value jackpot prizes has led to more public questions about how winnings should be taxed. The circular is intended to ensure consistent application of existing tax laws.
Tax Rates and How They Apply
Under the new guidance, resident taxpayers will pay a 20% final withholding tax on their gambling winnings. This applies to jackpots from casinos and other gambling operations across the country.
Nonresident aliens who are not engaged in any trade or business in the Philippines face a steeper rate. Their winnings will be taxed at 25% under the same final withholding tax structure.
The BIR made clear that the tax base covers gross winnings without any deductions. Service charges, administration fees, commissions, and other charges cannot be subtracted before calculating the tax owed.
That means the full prize amount is used to compute the tax liability. Players cannot reduce their taxable winnings by pointing to fees taken out by operators.
The agency said the circular is not intended to change the current tax scope. Instead, it aims to promote equity and uniformity in how gambling taxes are applied.
The guidance defines a jackpot prize as the highest prize that may be won in a game of chance. This includes prizes paid in cash or in other forms.
It also covers winnings from fixed prize pools, progressively increasing jackpots, and winning combinations in both table games and electronic gaming machines.
Operators Face Penalties for Noncompliance
The circular applies to winnings from both licensed gaming operators and unlicensed or unauthorized operators. The BIR said this follows the principle that income from any source is taxable under existing Philippine law.
Gaming operators have been designated as withholding agents under the circular. They are responsible for collecting and remitting the required taxes to the government.
The BIR warned that operators who fail to withhold or remit the correct tax amounts will face consequences. These include surcharges, interest charges, and compromise penalties.
The agency added that noncompliance could also lead to the filing of criminal actions against operators. This puts added pressure on gaming companies to follow the rules closely.
The Philippine gaming industry has been growing steadily in recent years. The expansion has brought larger jackpot prizes and increased attention on how those winnings are taxed.
With the circular now published, operators are expected to take on a clearer role in tax collection. The BIR said the guidance gives the industry a firmer reference point for tax compliance as gaming activity continues to grow.
