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rules and regulations or parts thereof which are inconsistent with any of the provisions of this Act are hereby repealed or modified accordingly.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."

New Legal Aid Requirements - For Indigents' Cause? Or A Lawyer's Dishonesty Contrivance?

A SUMMARY OF REQUIREMENTS
RULE ON MANDATORY LEGAL AID SERVICE

REQUIREMENTS.
Every practicing lawyer is required to render a minimum of sixty (60) hours of free legal aid services in a year.
o Practicing lawyer has been defined by the Rule as a member of the Philippine Bar who appears for and in behalf of parties in courts of law and quasi-judicial agencies, including but not limited to the NLRC, NCMB, DOLE Regional Offices, DAR Adjudication Board and NCIP. The term practicing lawyer shall exclude:
 Government employees and incumbent elective officials not allowed by law to practice;
 Lawyers who by law are not allowed to appear in court;
 Supervising lawyers of students enrolled in law student practice in duly accredited legal clinics of law schools and lawyers of NGOs and Peoples’ organizations;
 Lawyers not covered under subparagraphs (i) to (iii) including those who are employed in the private sector but do not appear for and in behalf of parties in courts of law and quasi-judicial agencies

The sixty (60) hours free legal aid services shall be spread within a period of twelve (12) months, with a minimum of five (5) hours each month. If the lawyer exceeds five hours free legal aid service in a month, the excess shall be credited for succeeding periods.
o Free legal aid services refer to:
 Appearance in court or quasi-judicial body for and in behalf of an indigent or pauper litigant
 Preparation of pleadings or motions
 Assistance by a practicing lawyer to indigent or poor litigants in court-annexed mediation and in other modes of alternative dispute resolution.
 Counsel de officio services

CREDIT FOR MCLE.
o A lawyer who renders mandatory legal aid service for the required number of hours in a year for the 3-year period covered by a compliance period under the MCLE Rules shall be credited to the following:
 2 credit units for legal ethics
 2 credit units for trial and pretrial skills
 2 credit units for alternative dispute resolution
 4 credit units for legal writing and oral advocacy
 4 credit units for substantive and procedural laws and jurisprudence
 6 credit units for such subjects as may be prescribed by the MCLE Committee
o A lawyer who renders mandatory legal aid service for the required number of hours in a year for at least 2 consecutive years within the 3-year period covered by a compliance period under the MCLE Rules shall be credited to the following:
 1 credit unit for legal ethics
 1 credit unit for trial and pretrial skills
 1 credit unit for alternative dispute resolution
 2 credit units for legal writing and oral advocacy
 2 credit units for substantive and procedural laws and jurisprudence
 3 credit units for such subjects as may be prescribed by the MCLE Committee

CERTIFICATE OF COMPLIANCE. The practicing lawyer shall secure a Certificate from the Clerk of Court attesting to the number of hours spent rendering free legal aid services in a case.

REPORT COMPLIANCE.
o The practicing lawyer shall report compliance with the requirement within ten (10) days of the last month of each quarter of the year (March, June, September, December).
o Said compliance report shall be submitted to the legal aid chairperson of the IBP Chapter within the court’s jurisdiction.
o The IBP Chapter shall issue a compliance certificate to the concerned lawyer and to the IBP’s NCLA.

Practicing lawyers shall indicate in all pleadings filed the number and date of issue of their certificate of compliance for the immediately preceding compliance period. Failure to do so would cause the dismissal of the case and expunction of the pleadings from the records.

PENALTIES.
o Failed to meet the minimum prescribed 60 hours – Practicing lawyer to explain to NCLA why he was unable to render the minimum prescribed number of hours. If no explanation has been given or if NCLA finds the explanation unsatisfactory, NCLA shall report and recommend to IBP Board of Governors that the erring lawyer be declared as a member of IBP not in good standing. Upon approval of NCLA’s report and recommendation, a notice of declaration shall be sent to the erring lawyer with a corresponding directive to pay a fine of P4,000.
o The “not in good standing” declaration shall be effective for a period of 3 months from receipt of erring lawyer. During such period, the lawyer cannot appear in court or any quasi-judicial body. Such status shall subsist even after the lapse of 3 month-period until and unless the penalty shall have been paid.
o Failed to comply with this Rule for at least 3 consecutive years – lawyer shall be subject of a disciplinary proceeding to be instituted motu propio by the Committee on Bar Discipline (CBD). If found administratively liable, a penalty of 1 year suspension may be imposed.
o Falsifies certificate/any form required to be submitted – shall be administratively charged with falsification and dishonesty and shall be subject to disciplinary action by the CBD, without prejudice to criminal charges.

New Rules on Corporate Rehabilitation

SC AMENDS RULES ON CORPORATE REHABILITATION

To expedite court procedures for the rehabilitation of corporations, partnerships and associations, the Supreme Court, on December 2, 2008, approved the new Rules of Procedure on Corporate Rehabilitation (A.M. No. 00-8-10-SC), The said rules, drafted by a committee of the Supreme Court with the assistance of private sector representatives, took effect last January 16, 2009, replacing the 2000 Interim Rules of Procedure on Corporate Rehabilitation.

The major amendments to the new Rules of Procedure on Corporate Rehabilitation include:

• Pre-Negotiated Rehabilitation Plans. Under the new Rules, if the proposed rehabilitation plan is approved by creditors holding at least two thirds (2/3) of the total liabilities of the debtor, which should be inclusive of (i) secured creditors holding more than half of the total secured claims and (ii) unsecured creditors holding more than half of the unsecured claims, then the parties can go to court for approval of the rehabilitation plan. From the filing of such petition, the court, in turn, is given a maximum of one hundred twenty (120) days to decide on the petition. Should it fail to do so within the said period, the rehabilitation plan shall then be deemed approved.

As regards other ordinary petitions for rehabilitation, the the court is given a maximum of one year to act on the petition. The new deadline set by the Supreme Court is expected to prevent delay in the resolution of rehabilitation cases, which has proven to be awfully detrimental to all the parties.

• Foreign Rehabilitation Proceedings. Another salient feature introduced by the Supreme Court is the recognition of foreign rehabilitation proceedings. This covers: (i) assistance sought by a foreign court or representatives in a Philippine court; (ii) assistance sought in a foreign state relative to a domestic rehabilitation proceeding; or, (iii) both pertaining to foreign and domestic proceedings.

With the new Rules of Procedure on Corporate Rehabilitation, debt-ridden companies and those encountering financial difficulties can look forward to some relief more than ever in view of the present global recession. ☺

Listed shares of stocks still DST exempt?

Yes, you read it right as the Congress is on its way for a new law for the EXTENSION of such tax exemption from documentary stamp tax (DST). With the advent of the present financial crisis in the neighborhood and for other genuine economic objectives, the Congress had take a great initiative of providing incentives for the local stock exchange, e.g. Philippine Stock Exchange, etc.

To start with and for the benefit of the new readers, let me share first my thoughts on how it works in a plain and simple manner. For investors and those in the industry, stock market is a good game of money and risk as it deals a level of some strategy and know-how to make money. In here, the process is simple. Investors, through some mediums like internet facilities, newsprint, listed company's homepages and the likes, simply choose among the listed shares in the stock market those whom it sees potential. Factors, such as companies objectives, financial flexibility, profitability, future programs, and other circumstances are among hose normally inquired into. In acquiring these shares, the lower the acquisition price, the better.

Upon acquisition, investors will then monitor the movement of the price of such share in the stock market to determine whether or not it is worth holding more time. The main objective is to see to it that the selling price of such listed shares are moving positively in the stock market. This time, the higher the market, the better as the yield or gain would be higher. Tight monitoring is not required but may be an advantage for closely monitoring the trend and movement of the shares and such market prices are determined for each and every trading day (trading day is normally on weekdays from think 9:15am to 1:00pm) . If the market of such share declines, it may matter much but may serve as a warning to forecast whether it will decline or will increase for the next few days. If it will increase then, better hold, but if it will decline in value, then, it may be sold outright. Specially so, if such decline will fall below the acquisition cost as a loss will be incurred upon disposition. Stock brokers and analysts may prove to be of great help for such purpose.

To illustrate, 1,000,000 listed A shares are bought at P1.00 per share. The following day, the market of such share becomes P1.5o per share, then the day after, it goes up to P2.00, while on the third day it falls to P1.4o. Because of the volume of the shares, a centavo movement of the market price is significant. It it will be sold at P1.50/share, then, it will gain half a million pesos (P1.50 less P1.00 and multiplied by 1,000,000 shares). Quite great, a the investors earns a half million in 24 hours! At P2.00 selling price, it earns a million , while P400k at P1.4 per share. During the third day at P1.4 per share, if it forecasts that the share will recover the next trading days, then, it is advisable to hold, otherwise, it may opt to sell. Its margin of decline maybe at any desired level higher that P1.00 in order to make money.

Wow, great money, right! At the back of it, how is such earning being taxed. Under Section 127 of the Philippine Tax Code , the gain discussed above is subject to a percentage tax otherwise termed as "stock transaction tax" at the rate of 1/2 of 1% of the gross selling price or gross value in money of such shares sold, bartered,exchanged or otherwise disposed, except upon dealers of securities. At P1.5 per share above, the tax would be P7,500 (P1.5 times 1,000,000 shares times .005). Such tax applies every time the listed share changes hands. Nevertheless, investors may be required to pay commissions to their brokers.

In another provision of the Tax Code, shares of stocks are subject to DST at the rate of P1.00 for every P200 par value of fractional part thereof on original transfer from corporation and P0.75 for subsequent transfer among the stockholders. Listed shares had bee exempt from such DST with the advent of RA 9243 for a period of five (5) years from such effectivity. With the proposed legislation, the said DST exemption shall CONTINUE to enjoy such exemption. Thus, investors will be earning much under tax exemption privileges. From my viewpoint, this would encourage the public to invest. As compared to deposits in regular banks, this is quite better, even without the tax exemption as the income from bank deposits are normally taxed at 20%.

Taxes affect lives, dare to care on taxes and save lives!