Philippine Finance Minister Recto recently revealed that the government is considering imposing an additional 10% tax on online gambling operators, which is expected to increase the national treasury by about 20 billion pesos annually. However, this proposal has raised widespread concerns within the industry: once implemented, the comprehensive tax burden of legal licensed gambling merchants could reach 48%, potentially becoming the highest in the world.
Arden Consult CEO and gambling law expert Tonet Quiogue strongly criticized the new tax proposal. She pointed out that the current Philippine online gambling industry already has to pay 30% in license fees, 5% in franchise taxes, and 3% in audit fees, which means handing over 35% to 38% of total gambling revenue to the government before deducting costs. "This is one of the highest in the world, and taxes must be paid even in the event of losses," she wrote in a briefing.
Quiogue warned that further taxation could push the entire industry underground, as has happened in France, Germany, and Kenya. She emphasized that legal operators are competing with tax-free illegal platforms, and excessive taxation will only weaken the competitiveness and regulatory capacity of the legal market.
The tax increase proposal has sparked heated debate, with some government officials even comparing online gambling to "sin products" like cigarettes, believing that they should be heavily taxed. However, Quiogue believes that setting a reasonable tax zone of 20% to 30% of total gambling revenue aligns with international best practices and helps balance fiscal revenue with healthy market development.
Moreover, she pointed out that the Philippine online gambling industry drives content development, payment, KYC, and other peripheral services, forming a complete ecosystem. If the policy is unbalanced, not only will legal gambling merchants face the risk of exiting, but the entire industry chain will be impacted.
Although Philippine President Marcos and related departments emphasize strengthening regulation and controlling addiction, how to balance governance and industry development remains an unresolved challenge.
