BIR Ruling

June 22, 1970 3rd Indorsement Respectfully referred to the Honorable, the Secretary of Finance, Manila, the within basic letter dated March 18, 1970 of Mr. A.P. Naval, Revenue Examiner II, Revenue District No. 64, Bacolod City, requesting a ruling whether the 5% limitation imposed on local governments as provided in Section 260 of the Tax Code applied only to boxing exhibitions or to all places of amusement subject to amusement tax under the first paragraph of said provision of law. Since the matter treated involves municipal taxation, it is believed that the same is not within the jurisdiction of this Office. acd In this connection, however, this Office respectfully submit its observations on the matter. Section 260 of the Tax Code as amended by R.A. No. 6110, is quoted hereunder for ready reference. "SEC. 260 Amusement Taxes . There shall be collected from the proprietor, lessee, or operator of theaters, cinematographs, concert halls, circuses and other places of amusement the following rates: (a) When the amount paid for administration is one peso or less, twenty percent; (b) When the amount paid for admission exceeds one peso, thirty percent; In the case of boxing exhibitions, there shall be collected from the proprietor, lessee, or operator an amusement tax at a rate equivalent to fifty per centum of the taxes prescribed in the preceding paragraph: Provided , That no local government shall impose any tax in excess of five per centum : Provided, further, That all laws and ordinances in contravention hereto are repealed. . . ." (Emphasis supplied) A review of the history of Section 260 of the Tax Code as amended by Republic Act No. 6110 will readily show that 5% limitation imposed on local governments refers only to boxing exhibitions and not to all places of amusement mentioned in the first paragraph thereof. It will be noted that Section 260 was first amended by Section 8, Republic Act No. 39, approved on October 1, 1946, and subsequently amended by Section 2, Republic Act No. 418, approved on June 18, 1949. The original provision of Section 260 as well as these amendments did not contain the said 5% limitation imposed on local governments. Thereafter, Section 260 was further amended by Section 1, Republic Act No. 991, approved on June 24, 1954 incorporating for the first time the particular provision on boxing exhibitions by reducing the amusement tax due on said exhibitions to 50% of the regular rates and limiting the rate of tax imposable by local government on such exhibition to 5%. For ready reference the title of Republic Act No. 991 and the pertinent provisions thereof are quoted hereunder: cd "REPUBLIC ACT NO. 991: AN ACT AMENDING THE FIRST PARAGRAPH OF SECTION TWO HUNDRED AND SIXTY OF THE NATIONAL INTERNAL REVENUE CODE BY REDUCING THE AMUSEMENT TAX ON BOXING EXHIBITIONS AND PROHIBITING MUNICIPAL CORPORATIONS FROM LEVYING FURTHER TAXES ON SUCH EXHIBITIONS EXCEPT UP TO THE AMOUNT OF FIVE PER CENTUM. xxx xxx xxx SEC. 1. The first paragraph of section two hundred and sixty of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "SEC. 260. Amusement taxes . There shall be collected from the proprietor, lessee, or operator of theaters, cinematographs, concert halls, circuses, and other places of amusement the following taxes: "(a) When the amount paid for admission exceeds twenty centavos but does not exceed twenty-nine centavos, four centavos on each admission; "(b) When the amount paid for admission exceeds twenty-nine centavos but does not exceed thirty-nine centavos, six centavos on each admission; "(c) When the amount paid for admission exceeds thirty-nine centavos but does not exceed forty-nine centavos, eight centavos on each admission; "(d) When the amount paid for admission exceeds forty-nine centavos but does not exceed fifty-nine centavos, ten centavos on each admission; "(e) When the amount paid for admission exceeds fifty-nine centavos but does not exceed sixty-nine centavos, twelve centavos on each admission; "(f) When the amount paid for admission exceeds sixty-nine but does not exceed seventy-nine centavos, fourteen centavos on each admission; "(g) When the amount paid for admission exceeds seventy-nine but does not exceed eighty-nine centavos, sixteen centavos on each admission; "(h) When the amount paid for admission exceeds eighty-nine centavos but does not exceed ninety-nine centavos, eighteen centavos on each admission; and "(i) When the amount paid for admission exceeds ninety-nine centavos, the tax will be thirty per centum . "In the case of boxing exhibitions, there shall be collected from the proprietor, lessee or operator an amusement tax at a rate equivalent to fifty per centum of the taxes prescribed in the preceding paragraph: Provided, That no local government shall impose any tax in excess of five per centum : Provided, further , That all laws and ordinances in contravention hereto are repealed." It should be noted that the title of the law mentions the term "such exhibition" instead of such "place of amusement" as provided in the first paragraph of Section 260 which are subject to the regular rates of amusement tax. Therefore, as the title of Republic Act No. 991 clearly implies, the 5% limitation provided for in said Act refers only to boxing exhibitions. Had Congress intended to apply such limitation to all places of amusement taxable under the first paragraph of Section 260, the same should have been stated in the said title of Republic Act No. 991. cdti MISAEL P. VERA Commissioner of Internal Revenue