Cebu City amusement tax hike eyed

Business Mirror
Wednesday, 03 December 2008 23:31


CEBU CITY—The Cebu City government is set to increase tenfold its amelioration taxes for amusement establishments to raise more revenues for its social-development projects.

The city council is set to approve the raising of the amelioration tax from P1 to P10 per customer.

More than 23,000 establishments are seen to be affected by the increase, said councilor Jose Daluz III, the council’s finance committee chairman.

Along with beer joints, the establishments which will be affected are massage parlors, adult entertainment establishments and cockfighting arenas, among others.

The taxes will be deposited in a trust fund to be managed by a special board chaired by the city mayor, who will determine projects to be funded by the tax revenues.

“P10 is a measly amount for customers in these establishments, but it will go a long way in addressing the ill products of our society,” Daluz told the BusinessMirror.

“We are specifying this industry as the one which will fund our nutrition
and health programs in the slum areas.”

At present, the amelioration fund raises only around P2 million a year. Daluz said the city treasurer’s office admitted to only collecting from 20 percent of the establishments who were supposed to be imposed with the tax.

“If we raise it to P10 [per customer], that is already P20 million for our social projects, especially for the children,” Daluz said.

Councilor Gerardo Carillo, however, questioned the provision of the proposed ordinance exempting establishments which are already paying amelioration taxes from paying amusement taxes. “Instead of increasing revenues, we are now decreasing the revenues of the city,” Carillo said.

Daluz, however, said imposing both the amelioration and amusement taxes constitutes double taxation because they both have the same subject—the customers.

He said the amusement taxes for beer joints and other similar establishments would not affect the city’s total amusement tax revenues because 60 percent of these come from theater receipts and public concerts.

The city raises over P50 million from amusement taxes every year.

The council deferred the approval of the ordinance to next week.