Memo to Operators on application of Franchise Tax and Final Tax on winnings above PhP10,000.00

Philippine Amusement and Gaming Corporatior A Sure Bet for Progress in Gaming, Entertainment and Nation Building

MeMorAnduM April 6,2018

T O : ALL GAMING SITE OPERATORS (BINGO GAMES)

F R O M : THE ASSISTANT VICE PRESIDENT,GLDD

SUBJECT : APPLICATiON OF 5% FRANCHISE TAX ON INCOME FROM BINGO

GAMES OPERATIONS OF PAGCOR-LICENSED GAMING SITES

meeting held on April 4, 2018: Please be advised that the PAGCOR Board of Directors approved the following in its

A. Electronic Bingo (eBingo) Games

1. Reversion to pre-RMC 33-2013 set-up, where the 5% Franchise Tax is applied to the Gross Gaming Revenues (GGR) prior to sharing by and between PAGCOR and the Bingo Operator. In effect, both PAGCOR and the franchise tax. Bingo Operator shall pay the 5% Franchise Tax. Consequently, PAGCOR and the Bingo Operator share 50%-50% on the GGR after deducting the 5%

2 Amendment of Regulation 22 Section 1 (b) of the Gaming Site Regulatory in the determination of Total Payouts, and (ii) to include the 5% franchise tax Manual for Bingo Games version 3.0 as amended to (i) exclude the Prize Tax deduction in the formula.

B. Traditional Bingo Games, Rapid Bingo, Gaming Arts and Pull Tab Bingo

1. For Traditional Bingo, reversion to pre-RMC 33-2013 set-up, where the 5% Franchise Tax is applied to the Gross Gaming Revenues (GGR). PAGCOR's shouldered by the Operator. 15% share in Gross Ticket Sales is preserved and the franchise tax amount is

2. In the case of Rapid Bingo, Gaming Arts and Pull Tab Bingo, reversion to pre. RMC 33-2013 set-up, where the 5% Franchise Tax is applied to the Gross Gaming Revenues (GGR) with a modification in the revenue sharing and the franchise tax amount is shouldered by the Operator, similar to Traditional Bingo. scheme such that PAGcOR's 15% share in Gross Sales is preserved

3. Amendment of Regulation 22 Section 1 (a) of the Gaming Site Regulatory Manual for Bingo Games version 3.0 as amended to (i) exclude the Prize Tax in the determination of Total Payouts, and (ii) include the remittance of the 5% franchise tax.

Implementation of the 5% Franchise Tax on Bingo game offerings shall take effect on the first (1st) quarter of 2018 i.e. beginning January 1, 2018.

C. Final Tax on Player's Jackpot Winnings from Bingo Games exceeding Ten Site Regulatory Manual for Bingo Games version 3.0 shall likewise be amended: Thousand Pesos (PhP10,000.00) where the following provisions of the Gaming

PAGCOR HOUSE: 1330 Roxas Boulevard, Ermita, Metro Manila, Philippines 1000 Tel. (632) 521-1542 Connecting AIl Departments Fax (632) 522-2969 Website: www.pagcor.ph

1. Regulation 8 Section 10 (c) as amended to include the Operator's option to shoulder the final tax on player's jackpot winnings.

2. Regulation 18-B Part I Section 7 (a)-5 as amended to include the revised guidelines on payment of the final tax for prizes of more than ten thousand pesos (PhP10,000.00).

3 Regulation 18-C Section 2 (b) as amended to delete the non-deduction of the final tax from the prize due to the winner.

4. Regulation 21 Section 3 last paragraph as amended to redefine Payouts (PO)

5. Regulation 21 Section 4 (c) as amended to revise the guidelines on accounting of payouts.

for Bingo Games version 3.0 as regards the final tax on player's jackpot winnings from Bingo Games exceeding Ten Thousand Pesos (PhP10,000.00) shall take effect on the date of publication of these amendments to the GSRM at the PAGCOR The implementation of the revised guidelines in the Gaming Site Regulatory Manual Regulatory website.

heading at the "Electronic Gaming and Poker" page of the Regulatory website. Player's Jackpot Winnings exceeding Ten Thousand Pesos (PhP10,000.00) and amendments to the GSRMs, kindly visit the corresponding link under Amendment To download the details of the manner of application of the Franchise tax, final tax on

For your strict compliance.

RAMON STEPHEN R VILLAFLOR AVP;GLDD

CC: CMED OCCEO

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