RMC No. 57-2026: Casino Jackpot Prizes and Gambling Winnings Are Subject to Final Withholding Tax
Revenue Memorandum Circular (RMC) No. 57-2026, issued by the Bureau of Internal Revenue (BIR) on May 26, 2026, clarifies that jackpot prizes from casino and other gambling activities are taxable “winnings” subject to final withholding tax (FWT) under Sections 24(B)(1), 25(A)(1), and 25(B) of the National Internal Revenue Code (NIRC). The tax is computed on the gross prize — not the amount after service charges or fees — at 20% for covered resident individuals and 25% for non-resident aliens not engaged in trade or business in the Philippines.
This guide summarizes who is covered, how the tax base and rates work, what operators must do immediately, and a worked payout example. For how final withholding certificates differ from creditable ones, see What Is BIR Form 2306? and the withholding certificate deadlines table.
Organize Your Withholding Remittance Calendar FREE →What did RMC No. 57-2026 clarify? #
RMC No. 57-2026 confirms that fixed and progressive jackpot prizes from casino and other gambling activities fall within the statutory definition of “winnings” when they are within the scope of existing tax law, so operators cannot treat a payout as outside FWT merely because it is labeled a jackpot, progressive jackpot, or casino prize.
The circular responds to questions from the expanding gaming industry regulated by the Philippine Amusement and Gaming Corporation (PAGCOR) and other authorized instrumentalities. It expressly says it does not create a new tax or expand rates beyond what the NIRC already provides — the practical effect is consistent withholding on covered jackpot payouts.
Coverage described in secondary summaries of the circular includes jackpot prizes paid in cash or in kind, electronic gaming machine (EGM) prizes, bingo jackpots, and progressive jackpots that accumulate until won.
Who must withhold, and which winners are taxed? #
Casino operators, gaming operators, and other withholding agents that process covered jackpot payouts must classify the winner, withhold at the correct rate, and remit the tax. Individuals who win covered jackpots receive the prize net of the applicable final tax.
| Winner classification | Governing provision | Final withholding rate |
|---|---|---|
| Citizen / resident alien (covered winnings) | NIRC Section 24(B)(1) | 20% |
| Non-resident alien not engaged in trade or business in the Philippines | NIRC Section 25(B) | 25% |
Operators should document the winner’s tax status before releasing the prize. Incorrect classification that under-withholds leaves the withholding agent liable for the deficiency plus surcharge, interest, and compromise penalties under Title X of the Tax Code, as restated in RMC No. 57-2026.
How is the tax base computed? #
The tax base is the gross amount of the jackpot prize or winnings — without deducting service charges, administrative fees, commissions, or similar charges. Finance teams that compute FWT on a net payout figure after house fees will under-withhold relative to the circular’s rule.
Worked example (fictional but realistic): A resident citizen wins a progressive casino jackpot of ₱500,000. The operator charges a ₱5,000 administrative fee before releasing funds.
| Item | Amount |
|---|---|
| Gross jackpot prize | ₱500,000.00 |
| Administrative fee (does not reduce the tax base) | ₱5,000.00 |
| FWT at 20% on ₱500,000 | ₱100,000.00 |
| Net cash to winner (after tax and fee) | ₱395,000.00 |
The operator remits ₱100,000 as final tax through the applicable final-withholding return cycle (typically quarterly remittance on BIR Form 1601-FQ for final income taxes withheld — see BIR Form 1601-FQ: How to File), and issues the payee the corresponding final-tax certificate (BIR Form 2306), not BIR Form 2307.
What should gaming operators do next? #
Operators should treat RMC No. 57-2026 as effective immediately (May 26, 2026) and align payout systems, player documentation, and remittance reconciliations with the gross-prize rule. Practical steps:
- Inventory prize categories that may be jackpots or similar winnings (fixed pools, progressive EGMs, bingo jackpots, table progressive prizes).
- Reconfigure payout systems so FWT is calculated on gross prize before fees.
- Capture winner tax classification (resident vs non-resident alien not engaged in trade or business) in claim documentation.
- Reconcile jackpot reports to withholding returns and remittance proofs (gross prize, rate, tax withheld, net paid, remittance date).
- Update house rules and player disclosures so winners know covered jackpots may be paid net of final tax.
Frequently asked questions #
What is RMC No. 57-2026? #
Revenue Memorandum Circular No. 57-2026, issued by the BIR on May 26, 2026, clarifies that jackpot prizes from casino and other gambling activities are taxable winnings subject to final withholding tax under the National Internal Revenue Code, computed on the gross prize without deducting service charges or fees.
What final withholding tax rate applies to casino jackpot prizes? #
Resident citizens and resident aliens covered by NIRC Section 24(B)(1) are subject to a 20% final withholding tax on jackpot prizes and other winnings. Non-resident aliens not engaged in trade or business in the Philippines are subject to a 25% final withholding tax under Section 25(B).
Is the tax computed on the net jackpot after fees? #
No. Under RMC No. 57-2026, the tax base is the gross amount of the jackpot prize or winnings, without any deduction for service charges, administrative fees, commissions, or similar charges.
Who must withhold tax on jackpot payouts? #
Casino operators, gaming operators, and other withholding agents that pay covered jackpot prizes or gambling winnings must withhold and remit the final tax. Failure to withhold and remit exposes the agent to surcharge, interest, compromise penalties, and possible criminal action under Title X of the Tax Code.
Does RMC No. 57-2026 create a new tax on gambling? #
No. The circular states it does not amend, modify, or expand the statutory scope, thresholds, or rates of taxable prizes and winnings. It clarifies that covered jackpot prizes already fall within existing NIRC provisions on winnings and must be withheld accordingly.
Summary #
RMC No. 57-2026 does not invent a new jackpot tax — it confirms that covered casino and gambling jackpots are “winnings” under the NIRC, taxed at 20% or 25% on the gross prize. Operators that still withhold on a net-of-fees base, or that skip classification of non-resident winners, are the ones most exposed. Pair remittance discipline on BIR Form 1601-FQ with the correct final-tax certificate so year-end 1604-F alphalist figures reconcile cleanly.