BIR Ruling No. 044-83

March 18, 1983 BIR RULING NO. 044-83 Gentlemen : This refers to your letter dated November 3, 1982 requesting opinion as to the business tax payable by you as the concessionaire of the Government to manage and operate the Lobby Admission System at the International Passenger Terminal Building of the New Manila International Airport. You represented that as Concessionaire, you undertook to provide 1) all necessary professional staff including but not limited to ticket clerks, receptionists and doormen to man all gates at the arrival and departure lobbies to ensure efficient and comfortable entry of passengers, VIP's guests, paying public and others; and 2) all necessary facilities, equipment such as but not limited to ticket booths, ticket vending machines, turnstiles, and other necessary equipment for the effective operation of the Admission System. It appears also that for your right or concession to operate the Admission System at the MIA, you are authorized to collect admission fee of P5.00 per person, subject to the condition that the number of visitors to be admitted to the lobby areas of the terminal shall not exceed 2,000 persons at any given time, to ensure comfort and convenience of passengers and the general public and avoid overcrowding in the premises. In reply, I have the honor to inform you that under the foregoing representation, you are not subject to the fixed annual tax of P100.00 imposed by Section 192(1) of the Tax Code, and to the 3% contractor's tax imposed by Section 205 of the same Code. This is so because, by managing and operating the admission system, you do not render any service. The theory of the 3% contractor's tax is that, it is tax on the sale of services or labor. However, you are subject to income tax on the said admission fees being collected by you. cdta Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue