Collection of Amusement Taxes

September 29, 1976 REVENUE MEMORANDUM CIRCULAR NO. 33-76 SUBJECT : Collection of Amusement Taxes TO : All Internal Revenue Officers and others concerned The pertinent provisions of Section 260 of the Tax Code, as amended, by Presidential Decree No. 69, read as follows: "SEC. 260. Amusement taxes . There shall be collected from the proprietor, lessee, or operator of theaters, cinematographs, concert halls, circuses and other places of amusement the following rates: "(a) When the amount paid for admission is one peso or less, twenty percent; "(b) When the amount paid for admission exceeds one peso, thirty per cent. "In the case of theaters or cinematographs, the taxes herein prescribed shall first be deducted and withheld by the proprietors, lessees, or operators of the theaters or cinematographs and paid to the Commissioner before the gross receipts are divided between the proprietors, lessees, or operators of the theaters or cinematographs and the distributors of the cinematographic films. "In the case of cabarets, day and night clubs, Jai-Alai and race tracks, there shall be collected from the proprietor, lessee or operator a tax equivalent to twenty per centum and in the case of cockpits, ten per centum of their gross receipts irrespective of whether or not any amount is charged or paid for admission. For the purpose of amusement tax, the term 'gross receipts' embraces all the receipts of the proprietor, lessee or operator of the amusement place. "xxx xxx xxx" On the other hand, pertinent portions of Sections 11, 13 and 23 of Presidential Decree No. 231, otherwise known as the Local Tax Code, read as follows: "SEC. 11. 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 said Sections 12, 13 and 14." "SEC. 13. 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 at the following rates: "(a) When the amount paid for admission is one peso or less, twenty per cent; and "(b) When the amount paid for admission exceeds one peso, thirty per cent. "In the case of theaters or cinematographs, the taxes herein prescribed shall first be deducted and withheld by the proprietors, lessees, or operators of the theaters or cinematographs and paid to the provincial treasurer concerned thru the municipal treasurer before the gross receipts are divided between the proprietors, lessees, or operators of the theaters or cinematographs and the distributors of the cinematographic films. "xxx xxx xxx." "SEC. 23. Scope of power . Except otherwise provided in this Code, the city may levy and collect, among others, any of the taxes, fees and other impositions that the province or the municipality may levy and collect. The exercise of the taxing powers of the city extends to the taxes, fees and other impositions mentioned in Sections 12, 13, 14, 15 and 16 of this Code which the city shall also impose and collect, to the exclusion of the national and municipal governments. "xxx xxx xxx." Provincial Circular No. 22-73 dated September 7, 1973 of the Department of Finance provides, in part, as follows: "V. ON TRANSFERRED TAXES AND FEES "A. National Taxes and Fees Transferred to the Province and Cities . "The power to levy and collect the following taxes and fees has been transferred from the National Government to the provinces under Sections 12, 13 and 14 and to the cities under Sections 23 of the Tax Code; "xxx xxx xxx "2. Amusement Tax on Admission to be collected from the proprietors, lessees, or operators of theaters, cinematographs, concert halls, circuses and other places of amusements; and "xxx xxx xxx "All amusement places liable for the payment of the amusement tax on admission shall pay the same to the corresponding local government effective October 1, 1973. "xxx xxx xxx" Pursuant to the above-quoted provisions of law and implementing circular, the power to assess and collect the amusement taxes on admission to theaters, cinematographs, concert halls, circuses and other places of amusements, heretofore exercised by the National Government thru the Bureau of Internal Revenue, in accordance with Section 260 of the Tax Code, has been transferred to the provinces and cities effective October 1, 1973. However, the assessment and collection of the annual fixed taxes due from said amusement places have not been transferred to the local government. These fixed taxes which are prescribed by Sections 182(A) (3) (hh) and (ii) of the Tax Code, are as follows: Amusement Place Annual Fixed Tax First Run Theaters and Cinema houses P500.00 Second Run Theaters and Cinema houses P200.00 Boxing arenas, swimming pools, resort. skating rinks, golf links and other places of amusement P100.00 In other words, the aforesaid fixed taxes remain national internal revenue taxes and therefore, should be collected by this Bureau. It will be noted that only the amusement taxes on admission to theaters, cinematographs, concert halls, circuses and other places of amusements have been transferred to local governments. Amusement taxes due from proprietors, lessees or operators of cabarets, day and night clubs, Jai-Alai and race tracks (20% of their gross receipts) and from cockpits (10% of their gross receipts) remain national internal revenue taxes, to be assessed and collected by the Bureau of Internal Revenue. In addition to the said percentage taxes, the Bureau shall collect from said taxpayers the annual fixed taxes due from the aforesaid taxpayers as prescribed by Section 182(A) (3) (cc), (kk), (ll) and (nn) of the Tax Code, which are as follows: Amusement Place Annual fixed tax unless otherwise specified Night clubs and day clubs P1,000.00 Cabarets P500.00 Jai-Alai, for each day on which games are played P250.00 Race tracks for each day on which races are seen on any track P1,000.00 Cockpits In chartered cities and municipalities in Greater Manila Area P1,500.00 In 1st and 2nd class municipalities P1,000.00 In 3rd and 4th class municipalities P500.00 In 5th, 6th and 7th class municipalities P100.00 Registration of Tickets In BIR Ruling No. 75-003 dated May 6, 1975, this Office has ruled that notwithstanding the transfer of the collection of the amusement taxes on admission to the local governments, as heretofore stated, the admission tickets to be used by proprietors, lessees or operators of theaters, cinematographs, concert halls, circuses and other places of amusement shall be registered with this Office prior to the use thereof in accordance with Section 17 of Revenue Regulations No. V-1, otherwise known as the Bookkeeping Regulations, pertinent portions of which are quoted as follows: "SECTION 17. ADMISSION TICKETS AND OTHER RECORDS TO BE ISSUED OR KEPT BY PERSON SUBJECT TO AMUSEMENT TAX : In the case of amusement or business places where fees or cover charges are required to be paid for admission, the proprietor, lessee or operator shall provide himself with tickets which shall evidence payment of fees or cover charges. The tickets shall be serially numbered and shall indicate the name of the place of amusement or business and the fees or cover charges. The serial number of each ticket and the admission fee or cover charge shall be printed on the ticket twice that when the ticket is divided into two upon being presented for admission both the serial number and the price shall appear on both parts. "xxx xxx xxx "Before being used, the tickets shall first be presented to the Commissioner of Internal Revenue, if the place of amusement or business is located in Manila, or to the provincial revenue agent or deputy provincial or city treasurer, if in the province, for approval and registration. The said officers shall keep a register of tickets in the form of a ledger, such that each place of amusement or business shall have a separate account or record for the purpose of entering therein all the tickets presented for approval and registration, indicating the date of registration, the classes of tickets, and the admission prices, the inclusive serial numbers, and the number of tickets of each class. The proprietor, lessee or operator of the place of amusement or business shall likewise keep a true and correct record of his stock of tickets, indicating the total number of registered and unregistered tickets, and of the registered tickets, how much has been sold from day to day. "xxx xxx xxx." Presently, however, the admission tickets are being registered with the Office of the Regional Director, Revenue District Officer or Collection Agent, as the case may be. All internal revenue officers and others concerned are hereby enjoined to give this circular as wide a publicity as possible and to see to it that the fixed and percentage taxes due from the taxpayers concerned are assessed and collected accordingly. EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3