While Mayor Tomas Osmeña said he disagrees to the proposal abolishing the 30 percent amusement tax, he favors this condition for live concerts —especially those by international artists.
Osmeña yesterday reacted to the proposal of councilor Hilario Davide III to scrap the amusement tax on shows and concerts and “social amelioration tax” on entertainment spots and related establishments. He also said that the collection of amelioration tax and other sports events should be devolved to the barangays.
“We don’t want to suspend the collection of amusement tax as far as movies are concerned because it’s too big an item. But for concerts, we want to forego them,” said the mayor.
“We can’t get concerts to come to Cebu because of the amusement tax,” he said adding that producers and promoters of concerts must be encouraged to hold their events here and give Cebuanos the opportunity to witness the live performances of musical artists.
Osmeña said abolishing the amusement tax might affect the city’s income, saying that the revenues from this source in 2006 represented about 5.2 percent of the city’s total income of P879.8 million that year.
The council’s committee on budget and finance also opposed to Davide’s proposal and argued that the city can still benefit from the amusement tax, which is still considered a significant source of income.
The P50 million yearly take from amusement tax for the past three years could go a very long way, the committee contended, and that its abolishment would be like “killing the goose that lays the golden eggs simply because predators are out to steal its golden eggs.”
Instead of abolition, the committee said that the tax law be revisited to determine better the exemptions from it, in line with the local government code, and to impose uniform taxation to all.
The committee, however, agreed with Davide that the city’s Omnibus Tax Ordinance is “imprecise and vague and may have been used by producers, organizers, promoters and sponsors to avoid payment of taxes.” It added that the law, due to its discretionary nature, has “become selective and confusing.”
The committee on laws, for its part, recommended that the proposal be returned to the author for some revisions, then set the first public hearing on the matter.
It also wanted to determine how much will be lost in the city revenues if the tax is abolished. It further asked if there has been a clamor from the public or stakeholders for the abolition.
Davide said his proposal to abolish the amusement tax will stimulate the entertainment industry. It will also amend the city’s Omnibus Tax Ordinance, which he said had some loopholes and seemingly ineffectively enforced.
Section 44 of the ordinance, however, already exempts operas, concerts, dramas, recitals and painting exhibits from taxes. — Wenna A. Berondo/RAE