Bureau of Local Government Finance Opinion

April 6, 1993 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Joey P. Pineda President Movie Producers Distributors Association of the Phils. 3rd Floor, Avenue Hotel Bldg. Rizal Avenue, Sta. Cruz, Manila S i r : This refers to your letter dated January 27, 1993 requesting opinion on the matter of computing the amusement tax from the proprietors, lessors, or operators of theaters/cinemas under Section 140 of the Local Government Code of 1991 (RA 7160). Said Section reads as follows: "Sec. 140. Amusement Tax . (a) The province may levy an amusement tax to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadium, and other places of amusement at a rate of not more than thirty percent (30%) of the gross receipts from admission fees. "(b) In the case of theaters of cinemas, the tax shall first be deducted and withheld by their proprietors, lessees, or operators and paid to the provincial treasurer before the gross receipts are divided between said proprietors, lessees, or operators and the distributors of the cinematographic films. "xxx xxx xxx" It is your contention that the gross receipts and the amusement tax are included in the admission price and that the gross receipts of the producers/distributors and theaters are categorically defined under the aforecited subsection (b) of Section 140 of the Code, to avoid double taxation. By way of extending technical assistance to local government units and taxpayers regarding the interpretation or clarification of the provisions of the Code pertaining to local taxation, this Department clarifies that the amusement tax imposed under Section 140 of the Local Government Code of 1991, shall be determined as follows: 1. If the admission ticket includes the amusement tax of thirty percent (30%),as well as other impositions such as a cultural tax, flood tax, and similar others, the balance of the admission price would no longer be subject to another 30% amusement tax. For example, if the total admission price is P15.00 and this includes an amusement tax of P3.40 and a cultural tax of P0.25, the balance of P11.35 would no longer be subject to another 30% amusement tax. The owner/operator of the moviehouse, theater, or amusement place shall, however, remit to the LGU concerned the amusement tax of P3.40 and the cultural tax of P0.25 collected from the moviegoers or patrons as part of the admission price. cd i 2. If the amount of tax, as well as other impositions, is not indicated on the face of the admission tickets, the price or amount paid for admission shall not be deemed to include the amount of such tax impositions and, therefore, such price or amount paid for the ticket shall be the basis for computing the amount of the amusement tax. For example, if the amount paid for admission is P15.00 and the amount of amusement tax is not indicated on the face of the ticket, the same amount of P15.00 shall be subject to said tax. If the rate is 30%,the amount of the tax payable would be P4.50. It is hoped that this will clarify matters. Very truly yours, By Authority of the Secretary: LORINDA M. CARLOS Executive Director Bureau of Local Government Finance