With potential revenues from films and concert events principally gone, native authorities models (LGUs) might want to look into taxing different sources, corresponding to on-line streaming sites, in accordance to the state-run National Tax Research Center (NTRC).
While the gradual easing of lockdowns has allowed some malls and film theaters to restart operations in some elements of the nation, LGUs would have to discover methods to recuperate dependable income that would have in any other case come from amusement taxes, the assume tank mentioned in a report final week.
For occasion, NTRC mentioned “there are online streaming shows that can still be classified as sources of amusement.” LGUs “can tap these sites as sources of tax revenues as the country enters the chapter of the ‘new normal’,” it added.
The assume tank, cited for instance, Chicago’s ruling to accumulate native amusement taxes from video sites and subscription channels.
Aside from the nationwide amusement tax prescribed by the Tax Code, an area levy can also be imposed by provinces, cities and municipalities beneath the Local Government Code of 1991.
National amusement taxes cowl the income of TV, radio and film producers in addition to cockpits, cabarets and golf equipment, jai alai, skilled basketball and boxing video games.
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Local governments, however, cowl gross sales of cinemas and theaters, live performance halls, circuses and boxing arenas, amongst different amusement locations, in accordance to the NTRC.
“Congress should consider reviewing the Local Government Code to align the limitations and taxing powers of LGUs to modern business models” in a bid to widen their tax base, the NTRC mentioned.
Prepandemic, the nationwide authorities collected amusement taxes averaging P134.5 million yearly from 2014 to 2018, whereas LGUs had a much bigger mixed annual common take of P887.72 million in the identical interval, the NTRC mentioned.
Yearly collections from nationwide and native amusement taxes additionally rose by a mean of 10.71 % and seven.76 %, respectively, through the interval.
But with varied quarantine measures in place, such because the closure of film homes, “LGUs in the greater Manila area were severely affected given that almost half of the amusement taxes contributors are located in this area,” NTRC mentioned.
The NTRC famous no less than six concert events of overseas artists scheduled on the top of probably the most stringent enhanced neighborhood quarantine (ECQ) from mid-March to May final yr have been canceled, leading to an estimated foregone revenues of P9.81 million.
“In the case of amusement tax from movie theaters, the estimated foregone revenue is about P270,625 per screening or P1.08 million for four movie screenings per theater, per day” through the ECQ interval, the NTRC mentioned.
The cancellation of cockfighting or “sabong” occasions final yr additionally resulted in “a significant loss of amusement tax collection for the national government as the ticket prices for [an international derby] ranged from P1,200 to P1,800,” the NTRC famous.
“Although local and national amusement taxes revenues are insignificant as percentage of total tax revenue of the local (less than 0.5 percent) and national government (less than 0.03 percent), it is still a reliable revenue source because these contribute income that can be used to finance various social and economic programs of the government,” the NTRC mentioned. INQ
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