Hike in documentary stamp tax 'practically paralyzed' PCSO, says chairman

The increase in documentary stamp tax (DST) on lotto tickets under the Tax Reform for Acceleration and Inclusion (TRAIN) Law has paralyzed the Philippine Charity Sweepstakes Office (PCSO), the agency's official said Tuesday.

Facing the House Committee on Appropriations during a budget briefing, PCSO Chairman Junie Cua said DST expenses have already dwarfed the budget for their Medical Access Program by P7 billion.

During the briefing, Cua appealed to lawmakers to bring the DST rate down to 5% from the present 20%.

He said since the DST was increased in 2019, which translated to increased expenses for the state-run agency, PCSO's medical access program was only about to provide P5.9 billion in assistance for 517,696 individuals in 2019 and P1.8 billion for 250,850 individuals in 2020.

Cua said these figures were lower than PCSO's medical access program fund of P8.6 billion that benefitted 528,190 individuals in 2018.

PCSO's medical access program released a slightly increased amount of assistance worth P2.1 billion in 2021, which benefitted 272,130 individuals. For 2022, it so far released P850 million for 110,403 individuals.

"(Increased) DST has practically paralyzed the agency. This DST, as of latest count/estimates, would reach to about P11 billion [for 2023]," Cua told the committee.

"That is why we are calling on Congress to reduce it to 5% so we will be at par with the tax levied on Pagcor (Philippine Amusement and Gaming Corporation). Pagcor is only levied 5% DST  and yet it does not have the mandate required of us," he added.

Under the law, the PCSO is the principal government agency "for raising and providing funds for health programs, medical assistance and services, and charities of national character thru the holding and conduct of sweepstakes horse races, lotteries and similar activities."

Cua presented data that PCSO's charity fund was used to pay for P7.8 billion of DST expenses alone in 2021, way below the allocation for its medical access program that only stood at P2.8 billion.

Cua also said the 20% DST has limited PCSO's capacity to fund the country's Universal Health Care (UHC) Program.

"The accumulated UHC fund pool of PCSO from 2019 to first  semester of 2022 has reached P2.57 billion and will be remitted directly to the Bureau of Treasury for PhilHealth’s National Health Insurance Program (NHIP) benefits improvement on or before September 15, 2022 consistent with the 'Transitory Provisions' of the Inter-Agency Joint Circular No. 1, series of 2022," he said.  —KBK, GMA News