Bureau of Local Government Finance Opinion

February 20, 1995 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Atty. Florecita P. Flores Counsel for Family Entertainment Operations Associations, Inc. (FEOAI) FLORES and ERESO Unit 104, Ground Floor First Midland Condominium Building Gamboa Street, Legaspi Village Makati, Metro Manila M a d a m : This refers to your letter dated June 29, 1994 in behalf of Family Entertainment Operators Association, Inc. (FEOAI) requesting confirmation that "the places of recreation" such as the childrens play centers, bowling alleys, skating rinks, and video machine centers located within its (the Citys) territorial jurisdiction are not subject to the 30% Amusement Tax provided in Section 140 of the Local Government Code (LGC) of 1991. Representations are made that FEOAI are owners and operators of the subject places of recreation, complaining on the alleged arbitrary interpretation of the City of Mandaluyong that said places are considered "amusement places" subject to the 30% amusement tax on admission. It is further represented that the city has issued assessments and threatened to close the said recreational places located within its territorial jurisdiction allegedly for failure to pay such assessments. In this connection, it is informed that in a 1st Indorsement dated July 19, 1994 to the City Treasurer of Mandaluyong City, copy enclosed, this Department expressed the view that: "Evidently, the 30% amusement tax may only be levied and collected on 'gross receipts from admission fees.' Stated otherwise, in cases where no admission fees are charged, the 'amusement place' shall not be subject to the 30% amusement tax. Such establishment, rather, may be taxable by that City under Section 143(h) of the Code in relation to Section 151 thereof. Accordingly, this Department concurs with your stand that FEOAI is not liable to the payment of 30% amusement tax on the subject "places of recreation". Under the letter dated August 31, 1994 of the City Attorney of said city, copy also enclosed, it was submitted that, "Pending resolution of the aforesaid Petition, it is recommended that a closure order, if any, should be withdrawn. Lets give all parties concerned enough time to resolve their differences short of going to a court of competent jurisdiction." In view hereof, it is advised that a dialogue between your client and the officials concerned of Mandaluyong City be sought in order that any differences may possibly be threshed out and amicably settled. Very truly yours, By authority of the Secretary: LORINDA M. CARLOS Executive Director Bureau of Local Government Finance