Bureau of Local Government Finance Opinion

June 22, 1994 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION The Acting City Treasurer City Treasurers Office Surigao City S i r : This refers to your letter dated 28 March 1993, seeking opinion on the legality of the collection of amusement tax on admission from restaurants and eateries providing entertainment to customers by employing the services of singers and an accompanist/organist to perform live at a specified time, for which a table charge is collected from each customer aside from the price of food it served. In this connection, attention is invited to the provision of Article 229 of the Implementing Rules and Regulations (IRR), implementing Section 140 of the Local Government Code (LGC) of 1991, quoted hereunder: "Art. 229. 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 stadia, and other places of amusement at a rate of not more than thirty percent (30%) of the gross receipts from admission fees." It is clear from the abovequoted provision that the basis of the tax is the admission fee. Thus a restaurant which provides entertainment to patrons for which it collects table charges which are not, in a ruling expressed by this Department in a letter dated January 16, 1981 to the Provincial Treasurer, Koronadal. South Cotabato, copy attached, considered as admission fee would not be liable to pay said tax. It is emphasized though that the table charges form part of the gross receipts that will serve as the basis of the business tax authorized under Article 232(h) of the IRR, implementing Section 132(h) of the Code. Please be guided accordingly. Very truly yours, LORINDA M. CARLOS Executive Director