The Supreme Court has upheld its decision declaring as unconstitutional the provisions of Republic Act No. 9167 mandating local government units to remit amusement tax to the Film Development Council of the Philippines.
However, the 15-member bench through Associate Justice Estela-Perlas Bernabe directed the Cebu City government to remit to FDCP the amount of P76.8 million, which the FDCP was entitled to prior to the Court’s en banc final decision.
The ruling declared as invalid and unconstitutional Sections 13 and 14 of RA No. 9167 which provided for the tax treatment of certain graded films—film producers were to be entitled to an incentive equivalent to the amusement tax imposed and collected by the cities, subject to various rates depending on the grade of their film, to be remitted to the FDCP.
In ruling against the appeal of FDCP, the high court said the agency failed to raise new arguments that would warrant the reconsideration of its decision.
“On the constitutionality issue, FDCP’s arguments in its motion are mere rehash of its position in the main and hence, cannot be sustained,” the SC said.
Court records showed that sometime in 1993, the City of Cebu, in its exercise of its power to impose amusement taxes under Section 140 of the Local Government Code, passed City Ordinance No. LXIX or the Revised Omnibus Tax Ordinance of the City of Cebu.”
Sections 42 and 43, Chapter XI of the ordinance requires proprietors, lessees or operators of theaters, cinemas, concert halls, circuses, boxing stadium, and other places of amusement to pay an amusement tax.
Congress passed RA No. 9167 on June 7, 2002 creating the FDCP.
FDCP asserted that from the time the new law took effect up to the present, among the covered cities, only the City of Cebu has failed to comply with the mandate of the law.
Because of this, FDCP sent demand letters for unpaid amusement tax reward with five percent surcharge for each month of delinquency due to the producers.
Because of the persistent refusal of the proprietors and cinema operators to remit the amounts FDCP demanded, and Cebu City’s assertion of a claim on the amounts in question, the Cebu City government filed a petition before the Regional Trial Court of Cebu City Branch 14 and sought for the declaration of Secs. 13 and 14 of RA No. 9167 as invalid and unconstitutional.