BIR Ruling

November 2, 1966 The Honorable Antonio J. Villegas Mayor of Manila Maharnilad, Manila S i r : In reply to your 1st Indorsement, dated June 14, 1966, requesting that the proceeds of the showing of the films of the nineteen (19) movie producers, managers and/or operators who participated in the Manila Film Festival, from June 19 to 30, 1966, be exempted from the payment of the national amusement tax, I have the honor to inform you that this Office finds no legal basis upon which to grant your request. The showing of the above-mentioned films was not undertaken by the City of Manila, but by the movie producers, managers and/or operators of the different theatres. Under Section 261 of the Tax Code, exemption lies only in cases where the admission fees are collected by or for and in behalf of duly registered charitable institutions or associations and the exemption is granted to the extent of only 50% of the tax. While the City of Manila may qualify also for partial exemption under this provision of the Tax Code, if it directly promotes a benefit showing and if the proceeds thereof will inure to the charitable undertakings of the City, like the Boys Town, nevertheless, it cannot avail of the exemption under the instant undertaking for as stated above, the film festival was not an undertaking of the City but of the theater owners themselves. The fact that the proceeds of the film festival are donated to the City Government is not of any moment. In view of the foregoing, your request for exemption has to be as it is hereby denied. LLjur Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue