I. Introduction

The explosive growth of online gaming in the Philippines — from casual mobile games and in-app purchases to online casinos, sports betting, poker rooms, and similar platforms — has made it commonplace for players to see line items labeled “tax,” “government tax,” “PH tax,” or “withholding tax” added to deposits, withdrawals, bets, or winnings.

The central legal question is simple but frequently misunderstood: Can a private online gaming platform lawfully impose or collect a tax from Filipino players?

The answer, under Philippine law, is almost never — unless the platform is expressly authorized by law to act as a withholding or collecting agent for the Bureau of Internal Revenue (BIR) or PAGCOR. Any “tax” charged without such authority is not a tax at all; it is a private fee, often deceptively labeled, and may constitute fraud, violation of the Consumer Act, or unjust enrichment.

This article exhaustively examines every relevant legal regime as of December 2025.

II. Fundamental Principle: Only the State Can Impose Taxes

Article VI, Section 28(1) of the 1987 Constitution and Section 5 of the National Internal Revenue Code (NIRC) reserve the power of taxation exclusively to the State. Private entities have zero sovereign authority to create or impose taxes.

Consequently:

A platform that deducts 5% from a player’s winnings and calls it “Philippine government tax” but does not remit it to the BIR is committing fraud by false pretense (Article 315, Revised Penal Code) and violating Republic Act No. 7394 (Consumer Act of the Philippines) through deceptive sales practices.
The BIR has repeatedly warned the public (Revenue Memorandum Circulars 2022–2024) that only registered withholding agents may deduct taxes, and any misrepresentation is punishable.

III. Non-Gambling Online Games (Mobile Games, PC Games, In-App Purchases, Subscriptions)

Applicable Tax: 12% Value-Added Tax on Digital Services

Legal Basis:

Section 105 & 108 of the NIRC, as amended
Republic Act No. 10963 (TRAIN Law)
Revenue Regulations No. 16-2021 (VAT on non-resident digital service providers)
Revenue Memorandum Order No. 55-2021 & subsequent issuances

Since 1 October 2021, foreign digital platforms (Google Play, Apple App Store, Steam, Epic Games, Roblox, Garena, Xbox, PlayStation Network, Netflix, Spotify, etc.) whose annual gross sales to Philippine consumers exceed ₱3,000,000 are required to:

Register with the BIR via the Online Registration and Update System (ORUS)
Charge 12% VAT on all transactions with Philippine-resident users
File monthly/quarterly VAT returns and remit the collected VAT to the BIR

Legality of Charging the Tax

Completely legal and mandatory.

The platforms are acting as collecting agents of the government. The VAT is added at checkout or embedded in the price, and the entire amount collected (less any input credits) is remitted to the BIR.

Players cannot legally avoid this VAT. Attempts to use VPNs or foreign accounts to bypass it constitute tax evasion if done deliberately and systematically (Section 254–255, NIRC).

IV. Online Gambling Platforms (Casinos, Sports Betting, Poker, e-Sabong, etc.)

This is where most illegal “tax charging” occurs.

Current Regulatory Status (December 2025)

Philippine Offshore Gaming Operators (POGOs / IGLs) were completely banned by President Ferdinand Marcos Jr. in July 2024, with the wind-up deadline of 31 December 2024. All POGO licenses were revoked. Operating one is now a criminal offense.
Domestic online gambling is permitted only if licensed by PAGCOR (e-games, e-bingo, sports betting via PAGCOR-licensed e-gaming platforms such as those operated by legitimate integrated resorts).
All other offshore sites (Stake, BC.Game, 1xBet, Bet365, PokerStars targeting Filipinos, etc.) are illegal under Philippine law when they accept Filipino players.

Taxes Applicable to Players

Income Tax on Winnings
- Gambling winnings of Filipino citizens and resident aliens are taxable as ordinary income under Section 24(A) read with Section 32(A)(7)(c) of the NIRC, subject to the graduated rates (0%–35%).
- There is no automatic withholding tax on domestic casino winnings for Filipino citizens (unlike foreigners, who are subject to 25% final tax under Section 25(A)(2)).
- Horse racing and licensed cockpits have specific 10% final withholding on winnings exceeding ₱10,000 (Section 126(A), NIRC), but this does not apply to online casinos or poker.
VAT on Online Gambling Services
- Online gambling is a “service” rendered in the Philippines when consumed here.
- Foreign online gambling platforms are therefore subject to the same 12% VAT regime as non-gambling digital platforms (RR 16-2021).
- Almost none of them comply. They neither register nor charge VAT, making their entire operation tax-evasive from the BIR’s perspective.

Can Online Gambling Platforms Legally Deduct “Tax” from Filipino Players?

Only in these extremely narrow circumstances:

The platform is PAGCOR-licensed for the domestic market and has been expressly designated by the BIR as a withholding agent (very rare in practice).
The deduction is a PAGCOR-imposed regulatory fee that the license explicitly allows to be passed on to players (again, rare).

In all other cases — which is 99.9% of platforms Filipino players actually use — the answer is no.

Common illegal practices observed as of 2025:

Deducting 5%–20% from winnings or withdrawals labeled “Philippine tax,” “government tax,” or “income tax withholding” → Illegal. The platform is not a Philippine withholding agent.
Charging 5% on deposits “for Philippine franchise tax” → Illegal. The old POGO 5% franchise tax was paid by the operator on gross gaming revenue, not passed on to players.
Labeling their own rake or processing fee as “tax” → Deceptive trade practice under RA 7394 and potentially estafa.

The BIR and PAGCOR have issued joint warnings (2023–2025) that such deductions are fraudulent when made by unlicensed operators.

V. Specific Platforms and Their Practices (As Publicly Known in 2025)

Platform Type	Typical “Tax” Charged	Legal Under PH Law?	Explanation
Google Play, Apple App Store, Steam	12% VAT on purchases	Yes	Mandatory under RR 16-2021
Roblox, Genshin Impact, Mobile Legends	12% VAT on Robux, Genesis Crystals, Diamonds	Yes	Same digital services VAT
Licensed PAGCOR e-bingo/sports betting	Usually none, or embedded regulatory fee	Yes, if authorized	Rare explicit pass-on
Offshore casinos (Stake, Rollbit, etc.)	5%–20% on withdrawal labeled “PH tax”	No	Fraudulent misrepresentation
Crypto gambling sites	5%–10% “tax” on winnings	No	No PH tax authority
Illegal POGO remnants	5% on GGR passed to player	No	POGOs banned; no legal basis

VI. Remedies Available to Players Who Were Illegally Charged “Tax”

File a consumer complaint with the Department of Trade and Industry (DTI) under RA 7394 for deceptive practice.
File a criminal complaint for estafa (Art. 315, RPC) or swindling via false pretenses with the NBI Cybercrime Division or local prosecutor.
Demand refund from the platform (many will refund when threatened with report).
Report the platform to BIR for operating without VAT registration and facilitating tax evasion.

VII. Conclusion

Under Philippine law as of December 2025:

Non-gambling online games and app stores may and must charge 12% VAT. This is lawful government tax collection.
Online gambling platforms — whether banned POGOs or unlicensed offshore sites — have no legal authority whatsoever to deduct or charge any amount as “Philippine tax” from players. Any such deduction is almost certainly a private fee fraudulently labeled as tax.

Players who encounter such charges on gambling platforms should treat them as red flags of illegality and consider the platform unscrupulous or outright criminal. The only “tax” a Filipino player legitimately owes on gambling winnings is the personal income tax he or she must declare and pay annually — not a percentage skimmed off the top by an unlicensed foreign website.