PBA vs CA
PD 1959 9the
August 8, 2000
Facts:
June 21, 1989 – PBA received assessment letter from the Commissioner of Internal
Revenue for the payment of deficiency amusement tax.
July 18, 1989 - PBA contested the assessment by filing a protest with respondent
Commissioner who denied the same.
January 8, 1990 – PBA filed a petition for review with the Court of Tax Appeals
questioning the denial by respondent Commissioner of its tax protest.
CTA – dismissed the petition
CA – affirmed CTA decision
Issue:
WON the amusement tax on admission tickets to PBA games a national or local tax?
National Tax
Held:
Petitioner contends that the Local Tax Code of 1973, transferred the power and
authority to levy and collect amusement taxes from the sale of admission tickets to
places of amusement from the national government to the local governments.
The laws on the matter are succinct and clear and need no elaborate disquisition.
Section 13 of the Local Tax Code provides:
"Sec. 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
amusement xxx."
However, the Court ruled that the foregoing provision of law in point indicates that the
province can only impose a tax on admission from the proprietors, lessees, or operators
of theaters, cinematographs, concert halls, circuses and other places of amusement. The
authority to tax professional basketball games is not therein included.
governing law) provides:
"SEC. 44. Section 268 of this Code, as amended, is hereby further amended
to read as follows:
Sec. 268. 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, race tracks and bowling
alleys, a tax equivalent to:
4.Fifteen per centum 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;
From the foregoing it is clear that the "proprietor, lessee or operator of xxx professional
basketball games" is required to pay an amusement tax equivalent to fifteen per centum
(15%) of their gross receipts to the BIR, which payment is a national tax. The said
payment of amusement tax is in lieu of all other percentage taxes of whatever nature
and description.
While Section 13 of the Local Tax Code mentions "other places of amusement",
professional basketball games are definitely not within its scope. Under the principle of
ejusdem generis, where general words follow an enumeration of persons or things, by
words of a particular and specific meaning, such general words are not to be construed
in their widest extent, but are to be held as applying only to persons or things of the
same kind or class as those specifically mentioned.
A historical analysis of pertinent laws does reveal the legislative intent to place
professional basketball games within the ambit of a national tax. The Local Tax Code,
which became effective on June 28, 1973, allowed the province to collect a tax on
admission from the proprietors, lessees, or operators of theaters, cinematographs,
concert halls, circuses and other places of amusement. On 1976, the operation of
petitioner was placed under the supervision and regulation of the Games and
Amusement Board, with the proviso (Section 8) that “all professional basketball games
conducted by the PBA shall only be subject to amusement tax of 5% of the gross receipts
from the sale of admission tickets." Then, PD 1456 came into effect, increasing the
amusement tax to 10%, as envisioned in PD No. 871 xxx." Later in 1984, PD 1959
increased the rate of amusement tax to 15% by making reference also to PD 871. With
the reference to the 3 laws (PD 871 by PD 1456 and PD 1959), there is a recognition
under the laws of this country that the amusement tax on professional basketball games
is a national, and not a local, tax. Even up to the present, the category of amusement
taxes on professional basketball games as a national tax remains the same. This is so
provided under Section 125 of the 1997 National Internal Revenue Code.

Section 140 of the Local Government Code of 1992 (Republic Act 7160), meanwhile,
retained the areas (theaters, cinematographs, concert halls, circuses and other places of
amusement) where the province may levy an amusement tax without including therein
professional basketball games.