Amendments to the NIRC Re: Franchise and Amusement Taxes

June 18, 1949

REPUBLIC ACT NO. 418

AN ACT TO AMEND SECTIONS TWO HUNDRED FIFTY-NINE AND TWO HUNDRED SIXTY OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED BY SECTIONS SEVEN AND EIGHT, RESPECTIVELY, OF REPUBLIC ACT NUMBERED THIRTY-NINE

SECTION 1. Section two hundred and fifty-nine of the National Internal Revenue Code, as amended by section seven of Republic Act Numbered Thirty-nine, is hereby further amended, so as to read as follows: cd i

"Sec. 259. Tax on franchises. — There shall be collected in respect to all existing and future franchises, upon the gross earnings or receipts from the business covered by the law granting the franchise a tax of five per centum or such taxes, charges, and percentages as are specified in the special charters of the grantees upon whom such franchises are conferred, whichever is higher, unless the provisions thereof preclude the imposition of a higher tax. For the purpose of facilitating the assessment of this tax, reports shall be made by the respective holders of the franchises in such form and at such times as shall be required by the regulations of the Department of Finance.

"The taxes, charges, and percentages on franchises, shall be due and payable as specified in the particular franchise, or, in case no time limit is specified therein, the provisions of section one hundred eighty-three shall apply; and if such taxes, charges, and percentages remain unpaid for fifteen days from and after the date on which they must be paid, twenty-five per centum shall be added to the amount of such taxes, charges, and percentages, which increase shall form part of the tax."

SECTION 2. Section two hundred sixty of the National Internal Revenue Code, as amended by section eight of Republic Act Numbered Thirty-nine, is hereby further amended, so as to read as follows:

"Sec. 260. Amusement taxes. — There shall be collected from the proprietor, lessee, or operator of theaters, cinematographs, concert halls, circuses, boxing exhibitions, 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; and

"(i) When the amount paid for admission exceeds ninety-nine centavos, the tax will be thirty per centum.

"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.

"In the case of cockpits, cabarets, and night clubs, there shall be collected from the proprietor, lessee, or operator a tax equivalent to ten per centum, and in the case of race tracks, twenty per centum 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 one hundred ninety-three. For the purpose of amusement tax, the term "gross receipts" embraces all the receipts of the proprietor, lessee, or operator of the amusement place.

"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 ten 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 tax due thereon. If the tax is not paid within the time prescribed above, the amount of the tax shall be increased by twenty-five per centum, 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 wilfully 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 per centum 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."

SECTION 3. This Act shall take effect upon its approval.

Approved: June 18, 1949

Published in the Official Gazette, Vol. 45, No. 10, p. 4315 in October 1949