MANILA — The Bureau of Internal Revenue (BIR) said jackpot prizes from casino and other gambling activities are considered taxable winnings and are subject to final withholding tax, depending on existing tax laws.

The BIR issued Memorandum Circular No. 57-2026 on Tuesday following inquiries on whether jackpot prizes, including progressive and fixed jackpots, fall under the definition of “winnings” under the Tax Code and are therefore taxable.

The circular defined a progressive jackpot prize as one that increases incrementally as more bets are placed across linked tables, electronic gaming machines, or bingo games until it is won.

The BIR said the policy applies to jackpot prizes or similar winnings earned by individuals, whether citizens or foreigners, from casino gaming and other gambling activities in the Philippines.

It added that the tax base for the 20-percent final withholding tax will be the gross amount of the jackpot prize, without deductions for service charges, administrative fees, commissions, or similar costs.

For non-resident individuals not engaged in trade or business in the Philippines, winnings will be subject to a 25-percent final withholding tax.

The agency said the country’s gaming and gambling sector has expanded under the regulatory framework of the Philippine Amusement and Gaming Corporation (PAGCOR) and other authorized entities, including the Cagayan Economic Zone Authority and the Aurora Pacific Economic Zone and Freeport Authority.

“This expansion has led to more high-value jackpot prizes for players,” the BIR said.

“In view of these developments, there is a compelling need to clarify the tax treatment of jackpot prizes to ensure consistent application of existing laws, promote equity and uniformity in taxation, and safeguard government revenue, without expanding or modifying the scope of the law,” it added.

BIR Commissioner Charlito Mendoza said the circular aims to remove confusion and improve compliance moving forward.

“the circular addresses possible confusion in coverage and strengthens compliance moving forward.”

He added that gaming operators are considered withholding agents and are responsible for remitting the correct taxes, warning that failure to do so will result in liability for taxes and penalties under the Tax Code.

The Bureau of Internal Revenue Bureau of Internal Revenue said the new memorandum seeks to standardize the tax treatment of gambling-related jackpot winnings and ensure proper revenue collection.