Lottery flaws have been fixed – PCSO

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The Philippine Charity Sweepstakes Office (PCSO) on Wednesday welcomed any inquiry in the implementation of its Small-Town Lottery (STL) program as it maintained that it has been reviewing the STL and implementing corrective measures to fix its flaws.

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The agency said that since 2010, it has implemented reforms in the STL including the payment of documentary stamp tax (DST) by STL operators.

The game was established in 2005 on an experimental basis to counteract illegal numbers games in the provinces.

It also aims to raise more funds for the PCSO’s social welfare programs, including its flagship Individual Medical Assistance Program (IMAP), ambulance donation, and medical equipment donation programs, among many others.

According to PCSO, its previous administrations received no audit observation memoranda (AOMs) from the Commission on Audit (COA) regarding DST on STL.

Upon assumption of office in July 2010 of the Board of Directors, they concentrated on tightening the control and monitoring aspects of the game.

The agency said it has not received “adverse opinion on the matter from the COA or Bureau of Internal Revenue.

From 2010 to 2012, the Board discovered weaknesses in the STL system that they corrected by imposing stricter implementing rules and regulations (IRR) in 2014, including the need for STL accredited agent corporations (AACs) to pay DST.

The PCSO explained the reduction of STL revenue share allocations to provinces, congressional districts, local government units (LGUs), and the Philippine National Police (PNP).

“In the IRR presently being implemented, the amounts are actually discretionary; under the charter, PCSO is not mandated to give STL shares to LGUs,” it said.

In a statement, the PCSO said it recognizes the efforts of these groups in fulfilling the STL purpose to provide an alternative to jueteng and allocated shares to them.

The LGU shares from STL revenues are taken from the Charity Fund allocation of the revenues.

Under the PCSO’s charter, its revenues are apportioned among three funds: 55 percent is allocated to the Prize Fund (for the games), 30 percent goes to the Charity Fund, and 15 to the Operating Fund (PCSO receives no funds from the government for its operating expenses).

The PCSO said LGUs and other stakeholders may request additional financial assistance from the agency.

“We have been strict and prudent in our management of PCSO, including its games and programs,” PCSO general manager Jose Ferdinand Rojas 2nd said.

Rojas stressed that under their watch, tax arrears from the previous administration amounting to over P2 billion had been paid, as were other debts, such as mandatory contributions to other government agencies.

He added that a fund of P2 billion to construct a PCSO headquarters has been set aside.

“The matter of the DST to be paid by STL operators was already taken up and incorporated into the STL IRR last year, way before the congressional hearing last Monday, and is being implemented this year.

We welcome any inquiry and can show our legal compliance in all matters,” said Rojas.

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