Assessment and Collection of Amusement Tax on Admission to Places of Amusement

February 19, 1988 REVENUE MEMORANDUM CIRCULAR NO. 08-88 SUBJECT : Assessment and Collection of Amusement Tax on Admission to Places of Amusement TO : All Internal Revenue Officers and Others Concerned Under the Local Tax Code (P.D. 231, as amended) the jurisdiction to levy amusement tax on gross receipts arising from admission to places of amusement has been transferred to the local governments to the exclusion of the national government. " Taxes transferred . The imposition of the taxes provided in Sections 12, 13, 14, 15 and 16 of this Code heretofore exercised by the national government or the municipal government, shall henceforth be exercised by the provincial government, to the exclusion of the national or municipal government. To avoid any revenue loss, the province shall levy and collect such taxes as provided in Sections 12, 13 and 14." (SEC. 11, LOCAL TAX CODE. EMPHASIS SUPPLIED) cd " Amusement tax on admission . The province shall impose a tax on admission to be collected from the proprietors, lessees, or operators of theaters, cinematographs, concert halls, circuses and other places of amusement. (SEC. 13, LOCAL TAX CODE. EMPHASIS SUPPLIED) The term "other places of amusement" embraces not only those enumerated under the Local Tax Code but includes all other places of amusement. aisa dc ". . . while cockpit, stadia and racetracks are not expressly stated in the above section (Section 13), they are deemed included in the blanket clause 'other places of amusement' because that which belongs to the class and is not specifically mentioned must be deemed included in the blanket clause."(OPINION OF THE SECRETARY OF JUSTICE, 1975; See also FINANCE MINISTRY RULING, DATED JANUARY 6, 1981) Since the promulgation of the Local Tax Code which took effect on June 28, 1973 none of the amendatory laws which amended the National Internal Revenue Code, including the value added tax law under Executive Order No. 273, has amended the provisions of Section 11 of the Local Tax Code. Accordingly, the sole jurisdiction for collection of amusement tax on admission receipts in places of amusement rests exclusively on the local government, to the exclusion of the national government. Since the Bureau of Internal Revenue is an agency of the national government, then it follows that it has no legal mandate to levy amusement tax on admission receipts in the said places of amusement. Considering the foregoing legal background, the provisions under Section 123 of the National Internal Revenue Code as renumbered by Executive Order No. 273 (Sec. 228, old NIRC) pertaining to amusement taxes on places of amusement shall be implemented in accordance with BIR RULING, dated December 4, 1973 and BIR RULING NO. 231-86 dated November 5, 1986 to wit: cd ". . . Accordingly, only the gross receipts of the amusement places derived from sources other than from admission tickets shall be subject to . . . amusement tax prescribed under Section 228 of the Tax Code, as amended (now Section 123, NIRC, as amended by E . O . 273) . The tax on gross receipts derived from admission tickets shall be levied and collected by the city government pursuant to Section 23 of Presidential Decree No. 231, as amended . . . " or by the provincial government, pursuant to Section 11 of P . D . 231, otherwise known as the Local Tax Code . Revenue Memorandum Circular No. 1-88 dated January 5, 1988 and any revenue issuance inconsistent herewith are hereby amended or revoked accordingly. All concerned are enjoined to give this Circular as wide a publicity as possible. (SGD.) BIENVENIDO A. TAN, JR. Commissioner