Revised Amusement Tax Regulations

May 30, 1957 REVENUE REGULATIONS NO. V-57 SUBJECT : Revised Amusement Tax Regulations TO : All Internal Revenue Officers and Other Concerned SECTION 1. Scope. Pursuant to the authority granted in section 338, in relation to section 4 of Commonwealth Act No. 466, otherwise known as the National Internal Revenue Code, as amended, the following regulations relative to the enforcement of the provisions of Title VIII, Chapter IV of the same Code are hereby promulgated to supersede all circulars, regulations, orders, precedents and rulings heretofore issued and published on the same subject and shall be known as Revenue Regulations No. V-57, or the Revised Amusement Tax Regulations. SECTION 2. Definition of Terms. For purposes of these regulations, the following terms shall be understood in the sense given below: (a) "Amusement" is a pleasurable diversion and entertainment, and is synonymous to recreation, relaxation, avocation, past-time, or fun. (b) The term "place of amusement" or "amusement place" includes any place where some forms of amusement are offered for enjoyment. (c) "Admission fee" means the amount paid or any consideration given for entrance, seats, tables, reserved or otherwise, and other similar accommodations in an amusement place, including charges for the use of facilities therein, irrespective of whether or not an admission ticket is issued in exchange for such admission fee or consideration. (d) "Theater" includes every edifice where operatic or dramatic performances or presentations or plays or other shows are held. (e) "Cinematograph" includes every building or enclosure where motion pictures are exhibited. (f) "Concert hall" includes places where operas, concerts, recitals, dramas, literary, oratorical, or musical programs are held. HTSIEa (g) "Opera" is a drama wholly or mostly sung, consisting typically of recitative, arias, choruses, duets, trios, etc.,with orchestral accompaniment, reludes and interludes, together with appropriate costumes, scenery and action. (h) "Drama" is a composition, now usually in prose, arranged for enactment and intended to portray life or character, or to tell a story by actions and, usually, dialogue tending toward some result based upon them; a play. It is designed, or composed as though designed, to be performed by actors on the stage. The definition does not include ordinary stage shows or vaudeville. (i) "Ballet" is a theatrical dance of an artistic and aesthetic character; especially an ensemble dance in which, with music and gesture, a pantomime is executed, usually with women and distinguished from all others by the greater variety, intricacy and expressiveness of its movements. (j) "Vaudeville" is a theatrical piece usually comic, the dialogue or pantomime of which is intermingled with light or satirical songs sometimes set to familiar airs, and usually accompanied by dancing, etc. (k) "Circus" includes every building, tent, or area where feats of horsemanship or acrobatic performances, etc. are exhibited. (l) "Boxing exhibition" includes very exhibition of the art or practice of attach * and defense with the fists. (m) "Cabaret" includes cafes, restaurants and all similar establishments where patrons are entertained by performers who dance and sing and/or where the patrons are allowed to dance with said performers or entertainers who are ordinarily professional hostesses. (n) "Night clubs" are resorts frequented by pleasure seekers at night where foods and wines and drinks are served and music furnished and the patrons allowed to dance whether with their own partners or professional hostesses furnished by such resorts. (o) "Professional hostess" shall include any woman employed in public resorts, such as cabarets and night clubs, to provide partners for pleasure seekers who may desire for one, usually for an honorarium in an amount discretionary to the pleasure seekers. (p) "Professional dancer" shall include any woman employed in cabarets or similar establishments who offers herself as dancing partner for a fixed fee for all such who may pick on her. (q) "Race tracks" includes all places where horses are entered to race as a public exhibition, whether or not money is bet on the result of such races. (r) "Cockpit" includes all places where cockfights are held, whether or not money is bet on the result of such cockfights. (s) "Gross receipts" embrace all the receipts of the proprietor, lessee or operator of the amusement place. The term shall also include the receipts from the sales of liquors, beverages, and other articles. In the case of cockpits, the term shall also include the receipts of the operator as commission from the owner of the winning cock, known as "plazada". SECTION 3. Amusement Tax on the Receipts Derived from Admissions. The first, second and third paragraphs of section 260 of the National Internal Revenue Code, as amended, provide 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 taxes: "(a) When the amount paid for admission exceeds twenty centavos but does not exceed twenty-nine centavos, four centavos on each admission; "(b) When the amount paid for admission exceeds twenty-nine centavos but does not exceed thirty-nine centavos, six centavos on each admission; "(c) When the amount paid for admission exceeds thirty-nine centavos but does not exceed forty-nine centavos, eight centavos on each admission; "(d) When the amount paid for admission exceeds forty-nine centavos but does not exceed fifty-nine centavos, ten centavos on each admission; "(e) When the amount paid for admission exceeds fifty-nine centavos but does not exceed sixty-nine centavos, twelve centavos on each admission; "(f) When the amount paid for admission exceeds sixty-nine centavos but does not exceed seventy-nine centavos, fourteen centavos on each admission; "(g) When the amount paid for admission exceeds seventy-nine centavos but does not exceed eighty-nine centavos, sixteen centavos on each admission; "(h) When the amount paid for admission exceeds eighty-nine centavos but does not exceed ninety-nine centavos, eighteen centavos on each admission; "(i) When the amount paid for admission exceeds ninety-nine centavos, the tax will be thirty per centum . "In the case of boxing exhibitions, there shall be collected from the proprietor, lessee, or operator an amusement tax at a rate equivalent to fifty per centum of the taxes prescribed in the preceding paragraph: Provided, That no local government shall impose any tax in excess of five per centum : Provided, further, That all laws and ordinances in contravention hereto are repealed. ASTIED "In the case of theaters or cinematographs, the taxes herein prescribed shall first be deducted and withheld by the proprietors, lessees, or operators of such theaters or cinematographs and paid to the Collector of Internal Revenue before the gross receipts are divided between the proprietors, lessees, or operators of the theaters or cinematographs and the distributors of the cinematographic films." (a) The above-quoted provisions prescribe the following rates of amusement taxes collectible from proprietors, lessees or operators of theaters, cinematographs, concert halls, circuses, and other places of amusement: Admission Price Tax From P0.21 to P0.29 P0.04 0.30 0.39 0.06 0.40 0.49 0.08 0.50 0.59 0.10 0.60 0.69 0.12 0.70 0.79 0.14 0.80 0.89 0.16 0.90 0.99 0.18 1.00 up 30% In the case of boxing exhibitions, only fifty per centum of the rates of tax prescribed above shall be due and payable. (b) In applying the above rates of amusement taxes to the different brackets of admission fees, the basis shall be the price of admission exclusive of the tax. In the determination of the proper bracket, the amount of the tax should first be deducted from the amount of admission indicated on the face of the admission tickets. Thus, if the price paid for admission as indicated on the face of the ticket is P0.30, the national amusement tax due thereon is P.04 and the basic admission price is P0.26, illustrated as follows: Basic admission price P0.26 National amusement tax 0.04 Admission price as indicated on the face of the ticket P0.30 ===== Likewise, if the admission price printed on the ticket is P0.90 the national amusement tax is P0.14 and the basic admission price is P0.76, illustrated as follows: Basic admission price P0.76 National amusement tax 0.14 Admission price as indicated on the face of the ticket P0.90 ===== (c) Where the amount paid for admission is P1.00 or more, exclusive of the tax, the rate of tax is 30% thereof. On an admission fee of P1.30, the tax may be arrived at as follows: HICcSA 100% - admission price 30% - amusement tax 130% - equals P1.30 1% = P0.01 100% = P1.00 admission fee exclusive of the tax 30% = P0.30 tax due (d) In places, however, where the city or municipality imposes municipal amusement taxes, the amount of municipal amusement tax should first be deducted from the price indicated on the face of the ticket. Thus, if the price paid for admission as indicated on the face of the ticket is P1.20 and the city or municipality imposes a P0.10-municipal amusement tax on this rate of admission fee, the national amusement tax is P0.18 and the basic admission price, P0.92, computed as follows: Basic admission price P0.92 National amusement tax 0.18 Municipal amusement tax 0.10 Total admission price as indicated on the admission ticket P1.20 ===== (e) An admission fee of P0.20 or less is exempt from the amusement tax. However, where admission tickets of P0.20 intended for children are issued to adults in such number to constitute one admission ticket for adults, the total value of the children's admission tickets actually used by adults is subject to the amusement tax at the rates prescribed by section 260 of the Tax Code, as amended. Consequently, the splitting of the admission fees for adults into as many children's fees as are covered thereby resulting in the issuance of as many number of children's admission tickets to correspond to a single adult admission ticket is fraudulent if the corresponding amusement tax due thereon is not paid by the proprietor, operator or lessee of the theater and the Collector of Internal Revenue has the power, pursuant to section 15 of the Tax Code, to assess the amusement tax and impose the 50% surcharge prescribed by section 260 of said code. (f) Admission fees in excess of P0.20 to athletic contests or exhibitions promoted by private entities or individuals are subject to the amusement tax imposed by section 260 of the National Internal Revenue Code, as amended, at the rates prescribed therein. (g) Receipts derived from the sales of ballots in connection with beauty contests are not taxable and the said ballots are not required to be registered. However, admission tickets to benefit shows or performances undertaken in connection with said beauty contests are subject to tax regardless of whether or not such tickets are entitled to votes. (h) Fees charged by a proprietor, lessee or operator of bowling alleys and billiard pools from their customers for the use of their bowling alleys and billiard tables are mere rentals for the use thereof, and therefore, not subject to the amusement tax imposed on admission fees to an amusement place. However, if admission fees or charges are collected from the general public for the privilege of witnessing billiard games and bowling contests, the admission fees or charges thereto in excess of P0.20 are subject to the amusement tax prescribed by section 260 of the Tax Code. (i) Admission tickets without prices indicated on their faces given to sponsors and/or patrons of any public exhibition or performance but actually paid for by said sponsors and/or patrons in an amount more than P0.20 per ticket are subject to tax. However, voluntary contributions which are not made as admissions to amusement places are exempt from the amusement tax. (j) The amusement tax attaches to the amount paid for each admission ticket issued and, therefore, if two or more admission tickets of different rates are issued, the total tax is determined by computing separately the tax on each admission ticket and adding together the taxes so computed. In other words, the tax for 10 admission tickets will always be the sum of the taxes for the ten admission tickets. (k) Where a fee is paid for admission to more than one attraction, the amusement tax is computed on the basis of such fee. In case of change in accommodation, such as from orchestra to balcony or from balcony to lodge, requiring the payment of additional fee to make up for the difference in the fee, the tax shall be based on the fee corresponding to the accommodation acquired in exchange of the first accommodation. SECTION 4. Amusement Tax on Gross Receipts. The fourth paragraph of section 260 of the National Internal Revenue Code, as amended, provides as follows: "In the case of cockpits, cabarets, and night clubs, there shall be collected from the proprietor, lessee, or operator a tax equivalent to 10%,and in the case of race-tracks, 20% of the gross receipts, irrespective of whether or not any amount is charged or paid for admission: Provided, however, That in the case of race-tracks, this tax is in addition to the privilege tax prescribed in section 193, [now section 182-A(3) (t)].For the purpose of amusement tax, the term "gross receipts" embraces all the receipts of the proprietor, lessee, or operator of the amusement place." (a) Proprietors, lessees, or operators of cockpits, cabarets, and night clubs are subject to an amusement tax equivalent to 10% of their gross receipts, and of race-tracks, to 20%, irrespective of whether or not any amount is charged or paid for admission. In the case of race-tracks, the amusement tax herein imposed is in addition to the fixed tax prescribed in section 182-A(3) (t) of the Tax Code. (b) Where the operators of the abovementioned amusement places at the same time operate within their premises a bar or restaurant, their receipts from such bar or restaurant shall form part of their taxable gross receipts. Admission fees paid to said places and any fee of whatever name paid for accommodation to said places also form part of the taxable gross receipts; so are rents received by the owners or operators of the aforementioned amusement places from the lease of bars, restaurants, and other concessions within their premises. (c) Where the bar or restaurant is operated or owned by a person other than the operator of the cockpit, cabarets or night club, the owner or operator of the said bar or restaurant shall be subject to the percentage tax under section 191 of the Tax Code, as amended and the payment thereof shall be in accordance with section 183 (a). (d) The amount of the tax payable by owners, lessees, or operators of cockpits, cabarets, night clubs and racetracks shall be computed on their gross receipts without excluding the tax, whether or not such tax is billed to customers as a separate item in the sales receipts. SECTION 5. Time and Manner of Payment of the Tax. The fifth and sixth paragraphs of section 260 of the National Internal Revenue Code, as amended, provide as follows: "The taxes imposed herein shall be payable at the end of each month and it shall be the duty of the proprietor, lessee, or operator concerned, within 10 days after the end of each month, to make a true and complete return of the amount of gross receipts derived during the preceding month and pay the day due thereon. If the taxes are not paid within the time prescribed above, the amount of the tax shall be increased by 25%,the increment to be a part of the tax. "In case of willful neglect to file the return within the period prescribed herein, or in case a false or fraudulent return is willfully made, there shall be added to the tax or to the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity or fraud, a surcharge of 50% of its amount. The amount so added to any tax shall be collected at the same time and in the same manner and as part of the tax unless the tax has been paid before the discovery of the falsity or fraud, in which case the amount so added shall be collected in the same manner as the tax." (a) The amusement taxes on the receipts derived from admissions to theaters, cinematographs, concert halls, circuses, boxing exhibitions and other places of amusement, and amusement taxes on the gross receipts of cockpits, cabarets, night clubs and race tracks shall be payable at the end of each month. It shall be the duty of the proprietor, lessee or operator concerned, within ten (10) days after the end of each month, to make a true and complete return under B.I.R. Form No. 37.01 (Revised February, 1957) showing the classes and serial numbers of admission tickets sold, the rates of admission fees or charges and the amount of gross receipts derived during the preceding month and pay the tax due thereon. The said B.I.R. Form is the amusement tax return for amusement places under section 260 of the National Internal Revenue Code. In the case of local performances by foreigners, however, the tax period shall be deemed terminated upon the completion thereof, and immediately, thereafter, the corresponding return must be filed and the tax due thereon paid. If said performances shall continue for months, the return must be filed within the period herein provided. In all cases, said foreign performers shall be required to file a bond in an amount equal to at least twice the estimated amount of the amusement tax due on their performance computed on the basis of the number of admission tickets registered, conditioned upon the faithful compliance by them with the law and regulations and for the satisfaction of all taxes, fines and penalties imposed by the National Internal Revenue Code. (b) If the tax is not paid within the time prescribed above, the amount of the tax shall be increased by twenty-five (25%) per centum, the increment to be a part of the tax. (c) In case of willful neglect to file the return, or in case a false or fraudulent return is willfully made, there shall be added to the tax or to the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity or fraud, a surcharge of fifty (50%) per centum of its amount, the surcharge so added to any tax shall be collected at the same time and in the same manner and as part of the tax. SAaTHc SECTION 6. Tax on Winnings: Withholding of Tax and Filing of Returns. Section 260-A, inserted between sections 260 and 261 of the National Internal Revenue Code, as amended by section 1 of Republic Act No. 586, provides as follows: "SEC. 260-A. Tax on winnings. Every person who wins in horse races or Jai-Alai shall pay a tax equivalent to two and one-half per centum of his winnings or "dividends",such tax to be based on the actual amount paid to him for every winning ticket after deducting the cost of the tickets. The tax herein prescribed shall be deducted from the "dividends" corresponding to each winning ticket and withheld by the operator, manager, or person in charge of the horse races or Jai Alai before paying the 'dividends' to the person entitled thereto. "The operator, manager, or person in charge of horse races or Jai-Alai shall, within ten days from the date the tax was deducted and withheld in accordance with the first paragraph hereof, file a true and correct return with the Collector of Internal Revenue in the manner or form to be prescribed by the Secretary of Finance, and pay within the same period the total amount of tax so deducted and withheld. "If the tax herein provided is not paid within the time prescribed above, or in case of willful neglect to file the return within the period prescribed herein, or in case a false or fraudulent return is willfully made, there shall be added to the tax or to the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity or fraud, the corresponding surcharges provided in section two hundred and sixty of this code." (a) The 2-1/2% amusement tax on winnings is imposed upon all persons winning in horse races and Jai-Alai. The tax is based upon the actual amount payable to the winners by way of dividends after deducting the cost of the winning ticket. (b) The law requires the operator, manager, or person in charge of horse races and Jai-Alai to deduct and withhold a tax of 2-1/2% on the winnings or "dividends" of all persons entitled thereto, to file an amusement tax return (BIR Form No. 37.01, Revised February, 1957) and pay the tax to the Collector of Internal Revenue or his deputies within ten (10) days from the date the tax was deducted and withheld. (c) If the tax is not paid within ten (10) days from the date the tax was deducted and withheld, the amount of the tax shall be increased by 25%,the increment to be a part of the tax. In case of willful neglect to file the return or in case a false or fraudulent return is willfully made, there shall be added to the tax a surcharge of 50% of its amount. SECTION 7. Amusement Tax Payable by Charitable Institutions. Section 261 of the National Internal Revenue Code, as amended by section 2, Republic Act No. 586, reads as follows: "SEC. 261. Amusement tax payable by charitable institutions. Where the admission fee or charges are collected by or for and in behalf of a duly registered charitable institution or association, the tax on such admission fees or charges shall be fifty per centum of the rates provided in section 260 of this code." (a) The above-quoted section of the Tax Code allows a partial exemption in favor of duly registered charitable institutions or associations. They are required to pay the tax computed at fifty per centum of the rates of amusement tax prescribed in section 260. This partial exemption in favor of duly registered charitable institutions or associations does not, however, apply either to the tax on the gross receipts realized by them in the operation of a cockpit, cabaret, night club or race-track, or to the tax on winnings provided for in section 260-A of the Tax Code. (b) In order that the 50% exemption may be granted, the amount to be donated to or the benefit actually derived by the registered charitable institution or association, must be substantial. The donation is deemed to be substantial if the amount donated is at least equal to 50% of the tax otherwise due and collectible. In other words, the amount donated must be at least equal to one-half of the full amount of the tax due if there was no exemption. (c) In order to be entitled to the 50% exemption herein provided, said charitable institutions or associations must be duly registered. The question of whether or not an association or institution is charitable depends upon the provisions of its constitution and by-laws or upon the purposes of its organization. Thus, an alleged registered charitable institution or association but which gives aid, help and relief only to its members is actually a mere mutual aid association or institution and, as such, is not entitled to the partial exemption. (d) Where boxing exhibitions are sponsored by or for and in behalf of duly registered charitable institutions, the tax on the admission fees or charges thereto shall be computed at twenty-five per centum of the rates of amusement tax prescribed in section 260. SECTION 8. Exemptions from the Payment of Amusement Tax on the Receipts Derived from Admissions. (A) Section 1 of Republic Act No. 722, provides as follows: "SEC. 1. The holding of operas, concerts, recitals, dramas, painting and art exhibitions, flower shows, and literary, oratorical or musical programs, except film exhibitions and radio or phonographic records thereof, shall be exempt from the payment of any national or municipal tax on the receipts derived therefrom." (1) Under Republic Act No. 722, the receipts derived from admissions to the above enumerated places of amusement are totally exempt from the payment of any national or municipal amusement tax. However, receipts derived from admissions to film exhibitions of operas, concerts, recitals, dramas, painting and art exhibitions, flower shows, and literary, oratorical or musical programs and radio or phonographic records of the same are subject to the amusement tax prescribed under the first paragraph of section 260 of the Tax Code. (2) In order that the admission fees to "operas, concerts, recitals, dramas, painting and art exhibitions, flower shows, literary, oratorical or musical programs" may be exempted from the payment of the amusement tax prescribed under section 260 of the Tax Code, it must be shown that they are not only the predominating features of the show but the principal attraction and life thereof, and that no other form of amusement is shown or exhibited in connection therewith, or in consideration of the admission fees collected. (3) Stage shows and vaudeville exhibitions do not come within the purview of Republic Act No. 722, and, therefore, admission fees thereto in excess of P0.20 are subject to the amusement tax prescribed by section 260 of the National Internal Revenue Code. (B) Section 260-B of the National Internal Revenue Code as inserted by Republic Act No. 1284, provides as follows: "SEC. 260-B. Athletic meets, school programs and exhibitions, and other educational activities conducted by public schools exempted. All athletic meets, school programs and exhibitions, and other educational activities conducted by any public school to which admission fees are charged shall be exempt from amusement tax: Provided, That the net proceeds therefrom shall accrue to the athletic fund or library fund of the school in the discretion of the school authorities." By virtue of the above provisions of law, all athletic meets, school programs and exhibitions, and other educational activities conducted by any public school where admission fees are charged, are exempt from amusement tax provided that the net proceeds derived therefrom shall accrue to the athletic fund or library fund of the school in the discretion of the school authorities. aIcHSC (4) Boxing exhibitions sponsored by the Philippine Sportswriters Association are exempt from the amusement tax prescribed in section 260 of the tax Code, pursuant to Republic Act No. 1373. SECTION 9. Registration of Amusement Places. Every person operating an amusement place shall register with the provincial revenue officer, or with the provincial treasurer, in case no provincial revenue officer is assigned to the province, or with the City Revenue Agent if in the City of Manila, his name and style, residence and the address where his amusement place is operated. In case of a firm, the names and residences of the persons constituting the same shall also be registered in addition to its name or style. In case the amusement place is leased to another, the obligation to register as herein required devolves upon the lessee. For the purpose of this registration B.I.R. Form No. 19.53 shall be used for application, and B.I.R. Form No. 19.54 shall be issued as certificate of registration. SECTION 10. Admission Tickets; Records to be Kept by Persons Subject to Amusement Tax; Signs; Disposition of Used Admission Tickets. (a) The proprietor, lessee or operator of an amusement place where fees or cover charges are required to be paid for admission, shall provide himself with admission tickets which shall evidence payment of fees or cover charges. The ticket shall be serially numbered and shall indicate the name of the place of amusement and the fees or cover charges. (b) Before the proprietor, lessee or operator of the place of amusement order tickets for printing he shall first send to the City Revenue Agent, if the business is located in Manila, or to the provincial revenue officer or the provincial treasurer, in case no provincial revenue officer is assigned, if in the province, a written notice stating the name and address of the printer with whom he intends to place the order, the classes of tickets, the inclusive serial numbers, the fee or cover charge, and the total number of each class of tickets. The proprietor, lessee or operator shall keep for record purposes the invoice or receipt issued by the printer covering the order. aDECHI It shall be the duty of the printer to submit, within ten days after the end of each calendar month, a report to the Collector of Internal Revenue, if in Manila, or to the provincial revenue officer or to the provincial treasurer, in case no provincial revenue officer is assigned, if in the province, of all admission tickets to amusement places printed by him indicating the inclusive serial numbers, classes, fee or cover charge thereof and the total number of tickets of each class. (c) After the tickets shall have been printed and before their being used, they shall first be presented to the City Revenue Agent, if the place of amusement is located in Manila, or to the provincial revenue officer or provincial 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 shall likewise keep a true and correct record of his stock of tickets, indicating the total number of registered tickets, and the number of registered tickets sold from day to day. It shall be unlawful for any proprietor, lessee or operator of an amusement place to keep in his possession any unregistered admission ticket to his amusement place. (d) All proprietors, lessees or operators of amusement places shall prepare monthly statements of their receipts from admission fees or cover charges, showing the total number of each class of tickets sold, the unit price of each class and the total amount collected, duly signed by them or their managers. The said statement shall be submitted to the City Treasurer, if the place of amusement or business is in Manila, or to the deputy provincial or city treasurer, if in the province, not later than the 10th day of each month as regards the business for the preceding month and pay the tax due thereon. Duplicate copies of the said statement shall be kept by the proprietor or operator as part of his accounting records and the same shall be preserved in the same manner as his books of accounts and other records. (e) Pass and complimentary tickets shall be printed and registered and shall be disposed of in the same manner as the regular admission tickets. (f) When the tickets are presented for admission at the gate or entrance of an amusement place, the same shall be divided crosswise into two by the porter or gate-keeper. One half thereof shall be delivered to the patron and the other half kept in a receptacle provided for the purpose which shall be preserved by the proprietor, lessee or operator of the amusement place until they shall have been verified by an internal revenue officer. In no case shall said tickets be destroyed without the prior authority of the Collector of Internal Revenue. Destruction shall be done only by burning. (g) The authority to burn the used admission tickets shall be granted by the Collector of Internal Revenue if the amusement taxes due on the used admission tickets have been paid and the correctness thereof duly verified. The burning, if in Manila, shall be witnessed by the proprietor, lessee or operator of the amusement place, or his designated representative, and three (3) representatives of the Regional Director one from the City Revenue Agent's Office, one from the Tax Audit Branch and the other from the Administrative Branch; and, if in the provinces, the burning shall be witnessed by the proprietor, lessee or operator of the amusement place, or his designated representative, and the provincial revenue officer and two (2) other ranking employees of the latter's office. (h) After the burning of the said tickets, the representative of the City Revenue Agent, if in Manila, or the Provincial Revenue Officer, if in the province, shall immediately submit a report thereon to the Regional Director with (1) a certificate of the destruction duly signed by all of those who witnessed the burning; and (2) a statement of used admission tickets, the use of which had not been authorized, or which were not duly registered in accordance with these regulations, or the serial numbers of which are not within the opening and closing numbers as reported in the monthly amusement tax returns for the period covered by the used admission tickets that were burned, if any. (i) Other persons subject to tax under section 260 of the National Internal Revenue Code shall keep true and correct records of their gross receipts. In case any of the records and registers hereinbefore mentioned are not appropriate for their business, they may devise and appropriate system for recording their receipts, but before using the same, they must be presented to the Regional Director, if in Manila, or the Provincial Revenue Officer or provincial treasurer, if in the province, for prior approval and registration. (j) In every place of amusement where fees or charges are collected for admission, the proprietor, lessee or operator shall conspicuously post at the outer entrance and near the box office one or more signs accurately stating the rates of admission prices, the tax due on each rate and the total of the admission price and the tax. The following is an example of such sign: Admission Price National Total Amusement Tax Loge P2.00 P0.60 P2.60 Balcony 1.38 0.42 1.80 Orchestra 1.00 0.30 1.30 SECTION 11. Filing of Performance Bonds: Forfeiture Thereof; and Exemptions. Persons, whether regularly engaged in business as operators of amusement places or as promoters or sponsors of amusement activities, shall upon registration of their admission tickets and other records as above provided, file a performance bond in an amount equal, as nearly as can be estimated, to twice the amount of amusement taxes payable by them during an average month, in the case of those regularly operating an amusement place, or twice the amount of the amusement taxes computed on the basis of the admission tickets registered, in the case of those promoting or sponsoring amusement activities. Such bond shall be conditioned upon the faithful compliance, during the time such amusement place or activity is operated, with the law and regulations relating to such business and for the satisfaction of all taxes, fines and penalties imposed by the National Internal Revenue Code. Such bond shall be cancelled and returned to the operator, promoter or sponsor upon his retirement from business and upon payment of all internal revenue taxes due from him relating to such business; otherwise, proceedings towards the forfeiture of such bond shall be taken by the Collector of Internal Revenue for the satisfaction of any deficiency amusement tax and penalties as may be found after investigation by an internal revenue officer. The Collector of Internal Revenue may, in meritorious cases, and upon written application therefor, exempt any person operating an amusement place or promoting or sponsoring an amusement activity from compliance with the provisions of this requirement of the Regulations. cIETHa SECTION 12. Manner of Accounting of Amusement Taxes. Collections of amusement taxes shall be accounted under Schedule "U", and the monthly collection report of city and deputy provincial treasurers shall be accounted under B.I.R. Form No. 12.01. The collections shall be subdivided in the said report as follows: U-1- Tax on Admission Fees U-1-a Cinematographs U-1-b Others U-2 Tax on Gross Receipts U-2-a Cockpits U-2-b Cabarets U-2-c Night clubs U-2-d Race tracks U-3- Tax on winnings U-3-a Jai Alai U-3-b Race tracks Vouchers supporting the Schedule "U" collections under the corresponding paragraphs shall be sent to the Bureau of Internal Revenue, together with the monthly collection report, under B.I.R. Form No. 12.01 as aforesaid. SECTION 13. Penalty for Violation. Violation of any provision of these regulations for which no specific penalty is provided by law is punishable under section 352 of the National Internal Revenue Code, by a fine of not more than P300 or by imprisonment for not more than six (6) months, or both. SECTION 14. Effective Date. These regulations shall take effect upon promulgation in the Official Gazette. (SGD.) JAIME HERNANDEZ Secretary of Finance Recommended by: (SGD.) JOSE ARAAS Collector of Internal Revenue