Bureau of Local Government Finance Opinion

November 29, 1996 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2nd Indorsement Respectfully returned to the Municipal Treasurer, Paraaque, Metro Manila, the within request for opinion relative to Ordinance No. 504, current series, imposing a two percent (2%) amusement tax on the gross receipts derived from pop, rock or other similar concert(s), enacted by the Sangguniang Bayan thereof on November 21, 1996. To copy of said ordinance that was attached to this set of papers, however, does not bear the signature of the Municipal Mayor. It is noted from representations made that subject ordinance was enacted to accommodate the "Michael Jackson Concert." This is plausible as it has become of public knowledge that the organizers of this concert had been shopping for a venue where, presumably, the rate of the amusement tax would be acceptable to them. Nevertheless, without taking into account the business concerns of the organizers of said concert, this Bureau reviewed the provisions of subject ordinance and hereunder are our findings: a. The rate of two percent (2%) imposed as amusement tax on pop, rock or other similar concerts under the amendatory provisions of Ordinance No. 504 may be considered as allowable inasmuch as the governing provision of the Local Government Code of 1991 (Sec. 140-a) only states that the rate of said tax shall not exceed thirty per cent (30%) of the gross receipts from admission fees b. There appears to be no evidence that a public hearing was conducted prior to the enactment of said ordinance as required under Section 187 of the Code. c. Likewise, there is no proof that the ordinance was published for three consecutive days in a newspaper of local circulation as mandated under Section 188 of the Code. In addition to the foregoing observations, attention is invited to the provisions of Article 276 of the Implementing Rules and Regulations (IRR) of the Code relative to Section 188 thereof, quoted below: "In case the effectivity of any tax ordinance or revenue measure falls on any date other than the beginning of the quarter, the same shall be considered as falling at the beginning of the next ensuing quarter and the taxes, fees, or charges due shall begin to accrue therefrom." Subject Ordinance No. 504 provides: "This ordinance shall take effect upon its approval." Accordingly, and even assuming that the same has been approved by the Municipal Mayor, the provisions of the new paragraph, (c), added to Section 1 of Ordinance No. 93-25, series of 1993, shall become effective only at the beginning of the first quarter of CY 1997, or on the first day of January 1997, Ordinance No. 504 having been enacted/approved only in November 1996. Thus, if the "Michael Jackson Concert" will be held in December 1996 as scheduled, the amusement tax of two percent (2%) of gross receipts prescribed in Ordinance No. 504 shall not be applicable thereto. Instead, the amusement tax that should be levied on the gross receipts that will be realized from the holding of said Concert should be determined on the basis of the provisions of Section 140(a) of the Local Government Code of 1991, as implemented by Ordinance No. 93-25, s. 1993, of that municipality. The foregoing views are expressed in line with the provisions of Article 287 of the IRR implementing the Code and not a declaration of the illegality of Ordinance No. 504, c.s., enacted by the Sangguniang Bayan thereof. That Office is, therefore, hereby advised to confer with the Municipal Mayor on the matter. By authority of the Secretary: (SGD.) LORINDA M. CARLOS Executive Director