Wednesday, July 1, 2009

Amusement tax now at 10% maximum from 30%

Good news to the amusement industry! R.A. 9640, amending Section 140 of Republic Act No. 7160 - The Local Government Code of 1991, lapsed into law on May 21, 2009 without the signature of the President. Said law provided a big drop of amusement tax rate from 30% maximum to now 10% maximum. This kind of tax is a local tax that is imposed by the respective local government unit (LGU) and covers the proprietors, lessees, or operators of the following:

* theaters;
* Cinemas;
* concert halls;
* circuses;
* boxing stadia; and
* other places of amusement.

Hereunder is the excerpt of the law for easy reference:

SECTION 1. Section 140 of Republic ct No. 7160, otherwise known as “The Local Government Code of 1991”, is hereby amended to read as follows

SEC. 140. Amusement Tax.
(a) The province may levy an amusement tax to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement at a rate of not more than ten percent (10%) of the gross receipts from admission fees.

(b) In the case if theatres or cinemas, the tax shall first be deducted and withheld by their proprietors, lessees, or operators and paid to the provincial treasurer before the gross receipts are divided between said proprietors, lessees, or operators and the distributors of the
cinematographic films.

(c) The holding of operas, concerts, dramas, recitals, painting and art exhibitions, flower shows, musical programs, literary and oratorical presentation, except pop, rock, or similar concerts shall be exempt from the payment of the tax herein imposed.

(d) The sangguniang panlalawigan may prescribe the time, manner, terms and conditions
for the payment of tax. In case of fraud or failure to pay the tax, the sangguniang panlalawigan may impose such surcharges, interests and penalties as it may deem appropriate.

(e) The proceeds from th amusement tax shall be shared equally by the province and he
municipality where such amusement places are located.”

SEC. 2. Repealing Clause.—All laws, executive orders, presidential decrees, ordinances, rules and regulations or parts thereof which are inconsistent with any of the provisions of this Act are hereby repealed or modified accordingly.

SEC. 3. Effectivity Clause.—This Act shall take effect fifteen (15) days after its complete publication in the Official gazette or in at least two (2) national newspapers of general circulation."