Republic of
the
Supreme
Court
SECOND DIVISION
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COMMISSIONER OF INTERNAL |
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G.R. No. 183505 |
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REVENUE, |
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Petitioner, |
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Present: |
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CARPIO, J., Chairperson, |
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- versus - |
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BRION, |
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ABAD, and |
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SM PRIME HOLDINGS, INC. |
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PEREZ, JJ. |
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and FIRST |
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DEVELOPMENT CORPORATION, |
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Promulgated: |
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Respondents. |
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February 26, 2010 |
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D E C I S I O N
When the intent
of the law is not apparent as worded, or when the application of the law would
lead to absurdity or injustice, legislative history is all important. In such cases, courts may take judicial
notice of the origin and history of the law,[1]
the deliberations during the enactment,[2]
as well as prior laws on the same subject matter[3]
to ascertain the true intent or spirit of the law.
This Petition
for Review on Certiorari under Rule 45 of the Rules of Court, in relation
to Republic Act (RA) No. 9282,[4]
seeks to set aside the April 30, 2008 Decision[5]
and the June 24, 2008 Resolution[6]
of the Court of Tax Appeals (CTA).
Factual
Antecedents
Respondents SM
Prime Holdings, Inc. (SM Prime) and First Asia Realty Development Corporation
(First Asia) are domestic corporations duly organized and existing under the
laws of the Republic of the
CTA Case No.
7079
On P119,276,047.40
for taxable year 2000.[8] In response, SM Prime filed a letter-protest
dated
On
On P124,035,874.12.[11]
On
CTA Case No.
7085
On
cinema ticket
sales for taxable year 1999 in the total amount of P35,823,680.93.[13] First
Subsequently,
the BIR issued a Formal Letter of Demand for the alleged VAT deficiency which
was protested by First Asia in a letter dated
On P35,823,680.93 for VAT deficiency for taxable year 1999.[16]
Accordingly, on
CTA Case No.
7111
On P35,840,895.78. First
Thereafter, the
BIR issued a Formal Letter of Demand for alleged VAT deficiency.[19] First
On P35,840,895.78 for taxable year 2000.[21]
This prompted
First Asia to file a Petition for Review before the CTA on
CTA Case No.
7272
Re: Assessment
Notice No. 008-02
A PAN for VAT deficiency
on cinema ticket sales for the taxable year 2002 in the total amount of P32,802,912.21
was issued against First Asia by the BIR.
In response, First Asia filed a protest-letter dated
Re: Assessment
Notice No. 003-03
A PAN for VAT deficiency
on cinema ticket sales in the total amount of P28,196,376.46 for the
taxable year 2003 was issued by the BIR against First Asia. In a letter dated
On P33,610,202.91 and P28,590,826.50
for VAT deficiency for taxable years 2002 and 2003, respectively.[25]
Thus, on
Consolidated
Petitions
The Commissioner
of Internal Revenue (CIR) filed his Answers to the Petitions filed by SM Prime
and First Asia.[27]
On
Upon submission
of the parties’ respective memoranda, the consolidated cases were submitted for
decision on the sole issue of whether gross receipts derived from admission
tickets by cinema/theater operators or proprietors are subject to VAT.[29]
Ruling of the
CTA First Division
On
IN VIEW OF ALL THE FOREGOING, this Court hereby GRANTS the Petitions
for Review. Respondent’s Decisions
denying petitioners’ protests against deficiency value-added taxes are hereby REVERSED.
Accordingly, Assessment Notices Nos. VT-00-000098, VT-99-000057, VT-00-000122,
003-03 and 008-02 are ORDERED cancelled and set aside.
SO ORDERED.[32]
Aggrieved, the CIR
moved for reconsideration which was denied by the First Division in its
Resolution dated
Ruling of the
CTA En Banc
Thus, the CIR appealed
to the CTA En Banc.[34] The case was docketed as CTA EB No. 244.[35] The CTA En Banc however denied[36]
the Petition for Review and dismissed[37]
as well petitioner’s Motion for Reconsideration.
The CTA En
Banc held that Section 108 of the NIRC actually sets forth an exhaustive
enumeration of what services are intended to be subject to VAT. And since the showing or exhibition of motion
pictures, films or movies by cinema operators or proprietors is not among the
enumerated activities contemplated in the phrase “sale or exchange of
services,” then gross receipts derived by cinema/ theater operators or
proprietors from admission tickets in showing motion pictures, film or movie
are not subject to VAT. It reiterated
that the exhibition or showing of motion pictures, films, or movies is instead subject
to amusement tax under the LGC of 1991. As regards the validity of RMC No.
28-2001, the CTA En Banc agreed with its
First Division that the same cannot be given force and effect for failure to
comply with RMC No. 20-86.
Issue
Hence, the
present recourse, where petitioner alleges that the CTA En Banc seriously erred:
(1)
In not
finding/holding that the gross receipts derived by operators/proprietors of
cinema houses from admission tickets [are] subject to the 10% VAT because:
(a)
THE
EXHIBITION OF MOVIES BY CINEMA OPERATORS/PROPRIETORS TO THE PAYING PUBLIC IS A
(b)
UNLESS
EXEMPTED BY LAW, ALL SALES OF SERVICES
ARE EXPRESSLY SUBJECT TO VAT UNDER SECTION 108 OF THE NIRC OF 1997;
(c)
SECTION 108
OF THE NIRC OF 1997 IS A CLEAR PROVISION OF LAW AND THE APPLICATION OF RULES OF
STATUTORY CONSTRUCTION AND EXTRINSIC AIDS IS UNWARRANTED;
(d)
GRANTING
WITHOUT CONCEDING THAT RULES OF CONSTRUCTION ARE APPLICABLE HEREIN, STILL THE
HONORABLE COURT ERRONEOUSLY APPLIED THE SAME AND PROMULGATED DANGEROUS
PRECEDENTS;
(e)
THERE IS NO
VALID, EXISTING PROVISION OF LAW
EXEMPTING RESPONDENTS’ SERVICES FROM THE VAT IMPOSED UNDER SECTION 108 OF THE
NIRC OF 1997;
(f)
QUESTIONS ON
THE WISDOM OF THE LAW ARE NOT PROPER ISSUES TO BE TRIED BY THE HONORABLE
COURT; and
(g)
RESPONDENTS
WERE TAXED BASED ON THE PROVISION OF SECTION 108 OF THE NIRC.
(2)
In ruling
that the enumeration in Section 108 of the NIRC of 1997 is exhaustive in
coverage;
(3)
In
misconstruing the NIRC of 1997 to conclude that the showing of motion pictures
is merely subject to the amusement tax imposed by the Local Government
Code; and
(4) In invalidating Revenue Memorandum Circular (RMC) No.
28-2001.[38]
Simply put, the
issue in this case is whether the gross receipts derived by operators or
proprietors of cinema/theater houses from admission tickets are subject to VAT.
Petitioner’s Arguments
Petitioner
argues that the enumeration of services subject to VAT in Section 108 of the NIRC
is not exhaustive because it covers all sales of services unless exempted by
law. He claims that the CTA erred in applying
the rules on statutory construction and in using extrinsic aids in interpreting
Section 108 because the provision is clear and unambiguous. Thus, he maintains
that the exhibition of movies by cinema operators or proprietors to the paying
public, being a sale of service, is subject to VAT.
Respondents’ Arguments
Respondents, on
the other hand, argue that a plain reading of
Section 108 of the NIRC of 1997 shows that the gross receipts of
proprietors or operators of cinemas/theaters derived from public admission are
not among the services subject to VAT.
Respondents insist that gross receipts from cinema/theater admission
tickets were never intended to be subject to any tax imposed by the national
government. According to them, the absence of gross receipts from
cinema/theater admission tickets from the list of services which are subject to
the national amusement tax under Section 125 of the NIRC of 1997 reinforces
this legislative intent. Respondents
also highlight the fact that RMC No. 28-2001 on which the deficiency
assessments were based is an unpublished administrative ruling.
Our Ruling
The petition is bereft of merit.
The enumeration of services subject to VAT
under Section 108 of the NIRC is not exhaustive
Section 108 of
the NIRC of the 1997 reads:
SEC.
108. Value-added Tax on
(A) Rate and Base of Tax. — There shall be
levied, assessed and collected, a value-added tax equivalent to ten percent
(10%) of gross receipts derived from the sale or exchange of services,
including the use or lease of properties.
The
phrase “sale or exchange of services”
means the performance of all kinds of services in the Philippines for others
for a fee, remuneration or consideration, including
those performed or rendered by construction and service contractors; stock,
real estate, commercial, customs and immigration brokers; lessors of property,
whether personal or real; warehousing services; lessors or distributors of cinematographic films; persons engaged
in milling, processing, manufacturing or repacking goods for others;
proprietors, operators or keepers of hotels, motels, rest houses, pension
houses, inns, resorts; proprietors or operators of restaurants, refreshment
parlors, cafes and other eating places, including clubs and caterers; dealers
in securities; lending investors; transportation contractors on their transport
of goods or cargoes, including persons who transport goods or cargoes for hire
and other domestic common carriers by land, air and water relative to their
transport of goods or cargoes; services of franchise grantees of telephone and
telegraph, radio and television broadcasting and all other franchise grantees
except those under Section 119 of this Code; services of banks, non-bank
financial intermediaries and finance companies; and non-life insurance
companies (except their crop insurances), including surety, fidelity, indemnity
and bonding companies; and similar
services regardless of whether or not the performance thereof calls for the
exercise or use of the physical or mental faculties. The phrase “sale or
exchange of services” shall likewise
include:
(1) The lease or the use of or the right or
privilege to use any copyright, patent, design or model, plan, secret formula
or process, goodwill, trademark, trade brand or other like property or right;
x
x x x
(7) The lease of motion picture films, films,
tapes and discs; and
(8) The lease or the use of or the right to use
radio, television, satellite transmission and cable television time.
x
x x x (Emphasis supplied)
A cursory reading of the foregoing
provision clearly shows that the enumeration of the “sale or exchange of
services” subject to VAT is not exhaustive.
The words, “including,” “similar services,” and “shall likewise
include,” indicate that the enumeration is
by way of example only.[39]
Among those
included in the enumeration is the “lease of motion picture films, films, tapes
and discs.” This, however, is not the
same as the showing or exhibition of motion pictures or films. As pointed out by the CTA En Banc:
“Exhibition” in Black’s Law Dictionary is defined
as “To show or display. x x x To produce anything in public so that it may be
taken into possession” (6th ed., p. 573). While the word “lease” is defined as
“a contract by which one owning such property grants to another the right to
possess, use and enjoy it on specified period of time in exchange for periodic
payment of a stipulated price, referred to as rent (Black’s Law Dictionary, 6th
ed., p. 889). x x x[40]
Since the
activity of showing motion pictures, films or movies by cinema/ theater
operators or proprietors is not included in the enumeration, it is incumbent
upon the court to the determine whether such activity falls under the phrase
“similar services.” The intent of the
legislature must therefore be ascertained.
The legislature never intended operators
or proprietors of cinema/theater houses to be
covered by VAT
Under
the NIRC of 1939,[41]
the national government imposed amusement tax on proprietors, lessees, or
operators of theaters, cinematographs, concert halls, circuses, boxing
exhibitions, and other places of amusement, including cockpits, race tracks, and cabaret.[42]
In the case of theaters or cinematographs, the taxes were first deducted,
withheld, and paid by the proprietors, lessees, or operators of such theaters
or cinematographs before the gross receipts were divided between the
proprietors, lessees, or operators of the theaters or cinematographs and the
distributors of the cinematographic films.
Section 11[43]
of the Local Tax Code,[44]
however, amended this provision by transferring the power to impose amusement
tax[45]
on admission from theaters, cinematographs, concert halls, circuses and other
places of amusements exclusively to the local government. Thus, when the NIRC of 1977[46]
was enacted, the national government imposed amusement tax only on proprietors,
lessees or operators of cabarets, day and night clubs, Jai-Alai and race
tracks.[47]
On
SECTION 102. Value-added
tax on sale of services. — (a) Rate and base of tax. — There shall be levied,
assessed and collected, a value-added tax equivalent to 10% percent of gross
receipts derived by any person engaged in the sale of services. The phrase
“sale of services” means the performance of all kinds of services for others
for a fee, remuneration or consideration, including those performed or rendered
by construction and service contractors; stock, real estate, commercial,
customs and immigration brokers; lessors of personal property; lessors or distributors of cinematographic
films; persons engaged in milling, processing, manufacturing or repacking
goods for others; and similar services regardless of whether or not the
performance thereof calls for the exercise or use of the physical or mental
faculties: Provided That the following services performed in the Philippines by
VAT-registered persons shall be subject to 0%:
(1) Processing
manufacturing or repacking goods for other persons doing business outside the
x x x x
“Gross receipts” means the total amount of money
or its equivalent representing the contract price, compensation or service fee,
including the amount charged for materials supplied with the services and
deposits or advance payments actually or constructively received during the
taxable quarter for the service performed or to be performed for another
person, excluding value-added tax.
(b) Determination
of the tax. — (1) Tax billed as a separate item in the invoice. — If the tax is
billed as a separate item in the invoice, the tax shall be based on the gross
receipts, excluding the tax.
(2) Tax
not billed separately or is billed erroneously in the invoice. — If the tax is
not billed separately or is billed erroneously in the invoice, the tax shall be
determined by multiplying the gross receipts (including the amount intended to
cover the tax or the tax billed erroneously) by 1/11. (Emphasis supplied)
Persons subject
to amusement tax under the NIRC of 1977, as amended, however, were exempted
from the coverage of VAT.[49]
On
Under the Local Tax Code (P.D. 231, as amended),
the jurisdiction to levy amusement tax on gross receipts arising from admission
to places of amusement has been transferred to the local governments to the
exclusion of the national government.
x x x x
Since the promulgation of the Local Tax Code which
took effect on June 28, 1973 none of the amendatory laws which amended the
National Internal Revenue Code, including the value added tax law under
Executive Order No. 273, has amended the provisions of Section 11 of the Local
Tax Code. Accordingly, the sole jurisdiction for collection of amusement tax on
admission receipts in places of amusement rests exclusively on the local
government, to the exclusion of the national government. Since the Bureau of
Internal Revenue is an agency of the national government, then it follows that
it has no legal mandate to levy amusement tax on admission receipts in the said
places of amusement.
Considering the foregoing legal background, the
provisions under Section 123 of the National Internal Revenue Code as
renumbered by Executive Order No. 273 (Sec. 228, old NIRC) pertaining to
amusement taxes on places of amusement shall be implemented in accordance with
BIR RULING, dated
“x x x Accordingly, only the gross receipts of
the amusement places derived from sources other than from admission tickets
shall be subject to x x x amusement tax prescribed under Section 228 of the Tax
Code, as amended (now Section 123, NIRC, as amended by E.O. 273). The
tax on gross receipts derived from admission tickets shall be levied and
collected by the city government pursuant to Section 23 of Presidential Decree
No. 231, as amended x x x” or by the provincial government, pursuant to Section
11 of P.D. 231, otherwise known as the Local Tax Code. (Emphasis supplied)
On
In 1994, RA 7716 restructured the VAT system by widening
its tax base and enhancing its administration.
Three years later, RA 7716 was amended by RA 8241. Shortly thereafter, the NIRC of 1997[51]
was signed into law. Several amendments[52]
were made to expand the coverage of VAT.
However, none pertain to cinema/theater operators or proprietors. At present, only lessors or distributors of
cinematographic films are subject to VAT.
While persons subject to amusement tax[53]
under the NIRC of 1997 are exempt from the coverage of VAT.[54]
Based on the
foregoing, the following facts can be established:
(1)
Historically, the activity of showing motion pictures,
films or movies by cinema/theater operators or proprietors has always been
considered as a form of entertainment subject to amusement tax.
(2)
Prior to the Local Tax Code, all forms of amusement tax
were imposed by the national government.
(3)
When the Local Tax Code was enacted, amusement tax on
admission tickets from theaters, cinematographs, concert halls, circuses and
other places of amusements were transferred to the local government.
(4)
Under the NIRC of 1977, the national government imposed
amusement tax only on proprietors, lessees or operators of cabarets, day and
night clubs, Jai-Alai and race tracks.
(5)
The VAT law was enacted to replace the tax on original
and subsequent sales tax and percentage tax on certain services.
(6)
When the VAT law was implemented, it exempted persons
subject to amusement tax under the NIRC from the coverage of VAT.
(7)
When the Local Tax Code was repealed by the LGC of 1991,
the local government continued to impose amusement tax on admission tickets
from theaters, cinematographs, concert halls, circuses and other places of
amusements.
(8)
Amendments to the VAT law have been consistent in
exempting persons subject to amusement tax under the NIRC from the coverage of
VAT.
(9)
Only lessors or distributors of cinematographic films are
included in the coverage of VAT.
These reveal the
legislative intent not to impose VAT on persons already covered by the
amusement tax. This holds true even in the case of cinema/theater operators
taxed under the LGC of 1991 precisely because the VAT law was intended to
replace the percentage tax on certain services.
The mere fact that they are taxed by the local government unit and not
by the national government is immaterial. The Local Tax Code, in transferring
the power to tax gross receipts derived by cinema/theater operators or
proprietor from admission tickets to the local government, did not intend to
treat cinema/theater houses as a separate class. No distinction must, therefore, be made
between the places of amusement taxed by the national government and those
taxed by the local government.
To hold
otherwise would impose an unreasonable burden on cinema/theater houses
operators or proprietors, who would be paying an additional 10%[55]
VAT on top of the 30% amusement tax imposed by Section 140 of the LGC of 1991,
or a total of 40% tax. Such imposition
would result in injustice, as persons taxed under the NIRC of 1997 would be in
a better position than those taxed under the LGC of 1991. We need not belabor that a literal
application of a law must be rejected if it will operate unjustly or lead to
absurd results.[56] Thus, we are convinced that the legislature
never intended to include cinema/theater operators or proprietors in the
coverage of VAT.
On this point, it is apropos to quote the case of Roxas v. Court of Tax Appeals,[57] to wit:
The power of taxation is sometimes called also the
power to destroy. Therefore, it should be exercised with caution to minimize
injury to the proprietary rights of a taxpayer. It must be exercised fairly,
equally and uniformly, lest the tax collector kill the “hen that lays the
golden egg.” And, in order to maintain the general public's trust and
confidence in the Government this power must be used justly and not
treacherously.
The repeal of the Local Tax Code by the LGC of
1991 is not a legal basis for the imposition of VAT
Petitioner, in
issuing the assessment notices for deficiency VAT against respondents,
ratiocinated that:
Basically, it was acknowledged that a
cinema/theater operator was then subject to amusement tax under Section 260 of
Commonwealth Act No. 466, otherwise known as the National Internal Revenue Code
of 1939, computed on the amount paid for admission. With the enactment of the Local Tax Code
under Presidential Decree (PD) No. 231, dated June 28, 1973, the power of
imposing taxes on gross receipts from admission of persons to cinema/theater
and other places of amusement had, thereafter, been transferred to the
provincial government, to the exclusion of the national or municipal government
(Sections 11 & 13, Local Tax Code).
However, the said provision
containing the exclusive power of the provincial government to impose amusement
tax, had also been repealed and/or
deleted by Republic Act (RA) No. 7160, otherwise known as the Local Government
Code of 1991, enacted into law on
October 10, 1991. Accordingly, the enactment of RA No. 7160, thus,
eliminating the statutory prohibition on the national government to impose
business tax on gross receipts from admission of persons to places of
amusement, led the way to the valid imposition of the VAT pursuant to Section 102
(now Section 108) of the old Tax Code, as amended by the Expanded VAT Law (RA
No. 7716) and which was implemented beginning January 1, 1996.[58]
(Emphasis supplied)
We disagree.
The repeal of
the Local Tax Code by the LGC of 1991 is not a legal basis for the imposition
of VAT on the gross receipts of cinema/theater operators or proprietors derived
from admission tickets. The removal of the prohibition under the Local
Tax Code did not grant nor restore to the national government the power to
impose amusement tax on cinema/theater operators or proprietors. Neither did it expand the coverage of
VAT. Since the imposition of a tax is a
burden on the taxpayer, it cannot be presumed nor can it be extended by
implication. A law will not be construed
as imposing a tax unless it does so clearly, expressly, and unambiguously.[59]
As it is, the power to impose amusement tax on cinema/theater operators or
proprietors remains with the local government.
Revenue Memorandum Circular No. 28-2001 is
invalid
Considering that
there is no provision of law imposing VAT on the gross receipts of
cinema/theater operators or proprietors derived from admission tickets, RMC No.
28-2001 which imposes VAT on the gross receipts from admission to cinema houses
must be struck down. We cannot
overemphasize that RMCs must not override, supplant, or modify the law, but
must remain consistent and in harmony with, the law they seek to apply and
implement.[60]
In view of the
foregoing, there is no need to discuss whether RMC No. 28-2001 complied with
the procedural due process for tax issuances as prescribed under RMC No. 20-86.
Rule on tax exemption does not apply
Moreover,
contrary to the view of petitioner, respondents need not prove their
entitlement to an exemption from the coverage of VAT. The rule that tax exemptions should be
construed strictly against the taxpayer presupposes that the taxpayer is
clearly subject to the tax being levied against him.[61]
The reason is obvious: it is both illogical and impractical to determine who
are exempted without first determining who are covered by the provision.[62]
Thus, unless a statute imposes a tax clearly, expressly and unambiguously, what
applies is the equally well-settled rule that the imposition of a tax cannot be
presumed.[63] In fact, in case of doubt, tax laws must be
construed strictly against the government and in favor of the taxpayer.[64]
WHEREFORE, the Petition is hereby DENIED. The assailed April 30, 2008 Decision of the
Court of Tax Appeals En Banc holding that gross receipts derived by
respondents from admission tickets in showing motion pictures, films or movies are not subject to value-added
tax under Section 108 of the National Internal Revenue Code of 1997, as amended,
and its June 24, 2008 Resolution denying the motion for reconsideration are AFFIRMED.
SO
ORDERED.
MARIANO C.
Associate Justice
WE
CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
|
ARTURO D. BRION Associate
Justice |
ROBERTO A. ABAD Associate
Justice |
JOSE P. PEREZ
Associate Justice
ATTESTATION
I
attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
C E R T I F I C A T I O N
Pursuant
to Section 13, Article VIII of the Constitution, and the Division Chairperson’s
attestation, it is hereby certified that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
[1]
[2] People v. Degamo, 450 Phil. 159, 179
(2003).
[3] Celestial Nickel Mining Exploration
Corporation v. Macroasia Corporation, G.R. Nos. 169080, 172936, 176226
& 176319, December 19, 2007, 541 SCRA 166, 195.
[4] An
Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating its
Rank to the Level of a Collegiate Court with Special Jurisdiction and Enlarging
its Membership, Amending for the Purpose Certain Sections of Republic Act No.
1125, As Amended, otherwise known as the Law Creating the Court of Tax Appeals,
and for Other Purposes.
[5] Rollo, pp. 98-120; penned by Associate
Justice Olga Palanca-Enriquez and concurred in by Presiding Justice Ernesto D.
Acosta and Associate Justices Juanito C. Castañeda, Jr., Lovell R. Bautista,
and Caesar A. Casanova. Associate
Justice Erlinda P. Uy was on official business.
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18]
[19]
[20]
[21]
[22]
[23]
[24]
[25]
[26]
[27]
[28]
[29]
[30] Approved
by the House on the Third
[31] Notice,
Publication and Effectivity of Internal Revenue Tax Rules and Regulations,
issued by then Commissioner Bienvenido A. Tan, Jr. on July 24, 1986.
[32] Rollo, p. 247.
[33]
[34]
[35]
[36]
[37]
[38]
[39] See Binay v. Sandiganbayan, 374 Phil. 413,
440 (1999).
[40] Rollo, p. 420.
[41] Commonwealth
Act No. 466.
[42] SECTION
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, two centavos on each admission.
x x x x
(i) When
the amount paid for admission exceeds ninety-nine centavos, ten centavos on
each admission.
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, race tracks, and
cabarets, x x x. For the purpose of the amusement tax, the term “gross
receipts” embraces all the receipts of the proprietor, lessee, or operator of
the amusement place, excluding the receipts derived by him from the sale of
liquors, beverages, or other articles subject to specific tax, or from any
business subject to tax under this Code.
x x x x
[43] SECTION
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.
[44] Presidential
Decree No. 231 (1973).
[45] SECTION
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 amusements 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.
x x x x
[46] Presidential
Decree No. 1158.
[47] SECTION
268. Amusement taxes. — There shall be
collected from the proprietor, lessee or operator of cabarets, day and night
clubs, Jai-Alai and race tracks, a tax equivalent to x x x x
[48] Executive
Order No. 273.
[49] SECTION
103. Exempt Transactions. — The
following shall be exempt from the value-added tax:
(a)
x x x x
(j) Services
rendered by persons subject to percentage tax under Title V;
x x x x
[50] SECTION
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 thirty percent (30%) of
the gross receipts from admission fees.
(b) In
the case of theaters 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.
x x x x
[51] Republic
Act No. 8424.
[52]
[53] SECTION
125. Amusement Taxes. — There shall be
collected from the proprietor, lessee or operator of cockpits, cabarets, night
or day clubs, boxing exhibitions, professional basketball games, Jai-Alai and
racetracks, a tax equivalent to:
(a) Eighteen percent (18%) in the case of
cockpits;
(b) Eighteen percent (18%) in the case of
cabarets, night or day clubs;
(c) Ten
percent (10%) in the case of boxing exhibitions: Provided, however, That boxing
exhibitions wherein World or Oriental Championships in any division is at stake
shall be exempt from amusement tax: Provided, further, That at least one of the
contenders for World or Oriental Championship is a citizen of the Philippines
and said exhibitions are promoted by a citizen/s of the Philippines or by a
corporation or association at least sixty percent (60%) of the capital of which
is owned by such citizens;
(d) Fifteen
percent (15%) in the case of professional basketball games as envisioned in
Presidential Decree No. 871: Provided, however, That the tax herein shall be in
lieu of all other percentage taxes of whatever nature and description; and
(e) Thirty
percent (30%) in the case of Jai-Alai and racetracks of their gross receipts,
irrespective of whether or not any amount is charged for admission.
For the purpose of the amusement
tax, the term 'gross receipts' embraces all the receipts of the proprietor,
lessee or operator of the amusement place. Said gross receipts also include
income from television, radio and motion picture rights, if any. A person or
entity or association conducting any activity subject to the tax herein imposed
shall be similarly liable for said tax with respect to such portion of the
receipts derived by him or it.
The taxes imposed herein shall be
payable at the end of each quarter and it shall be the duty of the proprietor,
lessee or operator concerned, as well as any party liable, within twenty (20)
days after the end of each quarter, to make a true and complete return of the
amount of the gross receipts derived during the preceding quarter and pay the
tax due thereon.
[54] SECTION
109. Exempt Transactions. — The
following shall be exempt from the value-added tax:
(a)
x x x x
(j) Services subject to percentage tax under
Title V;
[55] Now
12%.
[56] Commissioner of Internal Revenue v.
Solidbank Corp., 462 Phil. 96, 130 (2003).
[57] 131
Phil. 773, 780-781 (1968).
[58] Rollo, pp. 671-672; 681 and 693.
[59] Commissioner of Internal Revenue v. Court of
Appeals, 338 Phil. 322, 330 (1997).
[60] Commissioner of Internal Revenue v. Court of
Appeals, 310 Phil. 392, 397 (1995).
[61] Commissioner
of Internal Revenue v. The Phil. American Accident Insurance Company, Inc.,
493 Phil. 785, 793 (2005).
[62] Commissioner of Internal Revenue v. Court of
Appeals, supra note 59.
[63] Commissioner of Internal Revenue v. The
Phil. American Accident Insurance Company, Inc., supra.
[64]