By Lawrence Agcaoili

The government has lost as much as P182 million since 2001 after it opted to tax the horse-racing industry with the 12 percent value-added tax instead of the 25 percent franchise tax, data show.

Data from the National Tax Research Center showed that the government lost an average of P22.7 million a year since 2001 after the Bureau of Internal Revenue made the shift in taxation.

Taxes collected from Manila Jockey Club Inc. and Philippine Racing Club Inc. dropped by more than half to P21.92 million in 2001 with the imposition of the VAT compared with P44.62 million when the 25 percent franchise tax was still in effect.

Data showed that both companies paid an average of P38.7 million a year between 1998 and 2000 when the 25 percent franchise tax was still imposed.

?The conversion [in 2001] from franchise tax to VAT caused the government and the legal beneficiaries the sum of about P22.68 million in revenue loss or about 51 percent of the 2000?s collections of franchise tax,? NTRC executive director Lina Isorena said.

Isorena said VAT collected from the industry starting 2001 was increasing every year but were way below the collections when horse racing was covered by the 25 percent franchise tax.

As a result, she said legal beneficiaries of the horse racing industry suffered a 50 percent decline in the share of revenues. These include local government units, municipal hospitals, the Philippine Anti-Tuberculosis Society and the White Cross.

The anti-tuberculosis society just received P5.2 million in 2001 from about P10.7 million while the share of White Cross fell to P1.7 million from P3.6 million. Municipal hospitals also got only P6.1 million from P12.5 million that they used to receive.