Events
A raffle prize looks simple on the standee: win a phone, win ₱50,000. Behind it sits a tax question that the promo mechanics have to answer before the DTI approves them, and that the winner will ask on claim day: who pays the tax on the prize?
How is a raffle prize taxed in the Philippines?
Under the Tax Code as amended by the TRAIN law, Section 24(B)(1) imposes “a final tax at the rate of twenty percent (20%)” on prizes, except “prizes amounting to Ten thousand pesos (₱10,000) or less”, which are taxed under the regular income tax in Section 24(A) instead.
| Prize | How it is taxed |
| More than ₱10,000 | A 20% final tax, withheld when the prize is handed over |
| ₱10,000 or less | Not tax-free: it counts as the winner’s ordinary income, taxed at the regular rates |
| PCSO and Lotto winnings of ₱10,000 or less | Exempt. This exemption covers PCSO and Lotto winnings only, not a brand’s raffle |
The second row is the one promo plans get wrong. A small prize is not tax-free just because it is small; the Code only exempts small PCSO and Lotto winnings.
Who withholds the 20%?
Whoever hands over the prize. Section 57(A) of the Tax Code says the final tax under Section 24(B)(1) “shall be withheld by payor-corporation and/or person”. In a brand raffle that is the company the mechanics name as giving the prizes, usually the sponsoring brand.
Does the sponsor or the winner pay it?
Either, but it has to be decided before the promo is filed. The DTI’s Administrative Order 10-02 requires the application to state “whether the required taxes for the winnings shall be shouldered by the sponsors/applicants or by the winners, and in case of the latter, whether the same shall be withheld by the sponsors/applicants”.
| A ₱50,000 cash prize | Winner pays | Sponsor pays |
| Tax at 20% | ₱10,000, withheld from the prize | ₱10,000, paid by the sponsor on top |
| The winner receives | ₱40,000 | ₱50,000 |
| The prize costs the sponsor | ₱50,000 | ₱60,000 |
The last row is the budget line promo plans forget. If the mechanics say the sponsor shoulders the tax, the tax is a cost of the promotion. The table is an illustration of the 20% rate; ask your tax adviser how a sponsor-paid tax is computed for your prizes.
What about prizes that are not cash?
A phone, a trip or an appliance is still a prize. The DTI application lists each prize “if in kind, the description, brand, size, model, or make and their market value at the time of the application”, and says whether it can be converted to cash. Use that same market value in the mechanics, the budget and the tax computation, and confirm the valuation with your tax adviser.
Are any prizes tax-exempt?
Two exclusions in Section 32(B)(7) of the Tax Code sound close, but rarely fit a promotion.
→ Prizes for achievement. Prizes “in recognition of religious, charitable, scientific, educational, artistic, literary, or civic achievement” are excluded only if “the recipient was selected without any action on his part to enter the contest”. A raffle entrant took that action.
→ Sports prizes. Prizes to athletes are excluded only for competitions “sanctioned by their national sports associations”. A fun run at a brand activation qualifies only if its association sanctioned it.
The mechanics line
Write the tax sentence into the mechanics before filing: who shoulders the 20%, who withholds it, and the market value used for each prize in kind. The DTI asks for it, winners ask about it, and the promo budget depends on it.
What does a winner need on claim day?
→ The ID the mechanics named. The DTI application has to state “the requirements and/or the type of identification which will be required to claim prizes”.
→ Time to claim. The claim period after the promo ends “shall not be less than sixty (60) days from the notification or publication, whichever comes last”.
→ Notice in writing for larger prizes. Under Article 121 of the Consumer Act, winners of prizes of ₱500 or more are also notified in writing, by registered mail or any channel where proof of notice can be verified.
The permit side of the same raffle is in our guide to sales promotion permits, and the entry forms are covered in what the Data Privacy Act asks.
General information, not tax or legal advice. Rates and rules change; confirm the treatment of your prizes with a tax adviser before the promo is filed.
What should you ask the agency?
PUNX runs corporate events and brand activations from Makati: 50-plus people, founded 2023, with P&G, San Miguel, Petron, GCash and Sun Life on the client list. If you are comparing quotes from a top events agency in the Philippines, ask each one who files the promo permit and who withholds the prize tax. The answers show quickly who has run a raffle before.
FAQ
Are raffle prizes taxable in the Philippines?
Yes. Prizes above ₱10,000 carry a 20% final tax under Section 24(B)(1) of the Tax Code as amended by the TRAIN law. Prizes of ₱10,000 or less are not exempt; they are taxed as the winner’s ordinary income. Only small PCSO and Lotto winnings are exempt.
Who pays the tax on a raffle prize?
The final tax is withheld by whoever hands over the prize. Whether the sponsor shoulders it or the winner bears it is decided in the mechanics, and the DTI application must state which, and whether the sponsor withholds it.
Is a prize of ₱10,000 or less tax-free?
No. Prizes of ₱10,000 or less fall under the regular income tax instead of the 20% final tax. The exemption for winnings of ₱10,000 or less applies only to PCSO and Lotto.
How is a non-cash prize valued?
The DTI application lists each prize in kind with its description, brand, model and market value at the time of the application. Use the same value across the mechanics, the budget and the tax computation, and confirm it with a tax adviser.
Related
Brand activation and events — what PUNX runs, and how
Sales promotion permits — raffles, games and contests
Data privacy at activations — entry forms and consent
Raffle in the plan?
Send us the mechanics and the prize list. We will flag the permit timeline, the tax line and the claim rules before the DTI does.
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