Can Gaming I-Cafés Be Charged With Amusement Tax?
Hey, this topic can be very controversial and not pleasant to the ears of most i-café owners but we have to face the fact that some bright local legislators (councilors in the common parlance) may soon think about this and file an ordinance to this effect. We also have to contend with the fact that our LGUs are always in need of additional revenues to better serve its constituents.
Can pure gaming i-cafés or gaming revenues of mixed-service i-cafés (my definition for the purpose of this article) be slapped with thirty (30%) percent amusement or entertainment tax by an LGU? At present, such revenues are charged only with with two (2%) percent local tax and if such charging with amusement tax is possible and done, could this be the straw that will break the camel’s back?
Looking at Book II, Section 140 of the Local Government Code of the Philippines and I quote:
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 thirty percent (30%) of the gross receipts from admission fees.
Take note of the words “other places of amusement” and “admission fee”. Do these apply to the gaming services offered at most i-cafés? Does an i-café collect admission fees when they ask customers to “pay before play”? I take note of the fact that in the places of amusement specifically identified in the code such as theaters, cinemas, concert halls, circuses and boxing stadia, the customers are mere spectators and not participants to the events unfolding before their eyes. In gaming i-cafés, customers are active participants to the activities that entertain or amuse them.
The above discussion may have led to more questions than the answer to the topic. My objective in tackling this issue emanates from the current moves by LGUs to limit access of students of minor age to gaming i-cafés. Who knows, some LGUs out of their need to increase revenue and their desire to limit entries to the café business may just think of this regulation.
I have to disclose that am not a lawyer so I am not rendering any legal opinion on the matter. I have referred to some provisions of a statute and what I have written are just my personal opinion on the matter.