The Baguio City Government reiterated that certain artistic and cultural activities are exempt from amusement tax under existing law, clarifying the coverage of the exemptions amid concerns raised by creatives and event organizers over the city’s collection of the tax.
The clarification was made during a public consultation on August 19, 2026 following concerns raised after the City Public Information Office (PIO) posted information on amusement tax and permitting requirements for events.
The consultation brought together representatives of the Creative Baguio Character Council, City Budget Office, City Accounting Office, City Treasury Office, City Tourism Office, creatives, artists, event organizers, civil society organizations, and concerned citizens.
Councilors Yuri Weygan, Vladimir Cayabas, Jose Molintas, and Betty Lourdes Tabanda also attended on behalf of the local legislative body.
The city government explained that the prevailing 10-percent amusement tax is based on Section 140 of Republic Act No. 7160, or the Local Government Code of 1991, as amended by Republic Act No. 9640.
RA 9640 amended Section 140 of the Local Government Code by reducing the maximum amusement tax that may be imposed from 30% to 10% of gross receipts from admission fees.
The provision authorizes the imposition of amusement tax on theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement.
At the same time, it provides exemptions for the holding of operas, concerts, dramas, recitals, painting and art exhibitions, flower shows, musical programs, and literary and oratorical presentations, except pop, rock, or similar concerts.
City treasurer Alex Cabarrubias emphasized that the 10-percent tax is computed on gross receipts from admission fees, not net sales.
The local legislative history of the amusement tax traces back to Tax Ordinance No. 2000-001 whose Section 9 originally imposed a 30-percent amusement tax on admission fees collected from theaters, cinemas, concerts, concert halls, circuses, and other places of amusement.
The ordinance also imposed a five-percent rate on sports activities and identified disco houses, nightclubs, music lounges, folk houses, and sing-along joints that collect entrance fees as other places of amusement.
It likewise provided exemptions for operas, concerts, dramas, recitals, painting and art exhibitions, flower shows, musical programs, literary and oratorical presentations, except pop, rock or similar concerts, as well as other activities specified in the ordinance.
Tax Ordinance No. 2005-01 later amended Section 9 of Tax Ordinance No. 2000-001, reducing the local amusement tax rate from 30% to 15%.
RA 9640 subsequently amended the national law and reduced the maximum rate to 10% which is the prevailing rate being applied.
The city government also cited Section 2A of Tax Ordinance No. 2000-001 which provides that persons engaging in businesses, trades, amusements and similar activities in Baguio City must first obtain the necessary permits and pay the taxes, fees, and other charges required by law.
The councilors in attendance clarified that the collection of amusement tax is being implemented in compliance with national laws governing the tax.
They said altering the rates or provisions prescribed by national law is not within the ambit of the local government and may be considered ultra vires, or beyond its legal authority.
The councilors said a position paper from Baguio citizens, with the assistance of the city government, could help trigger a review or revision of the existing amusement tax regulations.
For activities not covered by existing exemptions, however, the councilors said organizers may appeal to the Baguio City Council for an exemption, discount, or waiver of certain fees when the circumstances justify it.
They particularly cited events where the city government itself is a co-sponsor as possible grounds for consideration.
The councilors also expressed the position that performances conducted purely for artistic purposes should not be subjected to taxation but should instead be regulated through proper notification and coordination with the city government.
They acknowledged, however, that distinguishing an activity conducted purely for art from a commercial event can be difficult.
Organizers, particularly those mounting musical shows and similar events, pointed to their contribution to Baguio’s economic sustainability and local tourism.
They said such events generate economic activity for performers, suppliers, venues, merchants, and help attract visitors to the city at the same time.
In view of these contributions, participants proposed that the 10-percent amusement tax be computed based on net sales instead of gross receipts, allowing organizers to deduct expenses before the tax is applied.
The City Accounting Office, however, reiterated that the prevailing 10-percent amusement tax is computed based on gross receipts from admission fees, not net sales.
Participants also questioned why pop and rock concerts are not included in the exemptions, arguing that these genres are likewise forms of artistic expression.
They proposed that small-scale non-exempt events, particularly those involving only around 20 to 50 ticketed participants or fewer, be considered for exemption from amusement tax.
Some event organizers said they were not properly oriented on the exemptions and that there were instances when they were asked to pay amusement tax even when their activities may have qualified for an exemption.
Participants called for clearer information and guidance from the city government so organizers can determine beforehand whether their activities are covered by the tax or fall under an exemption.
They also called for certain city fees to be waived for artists, particularly for small-scale activities. The Mayor’s Office, through a message relayed during the consultation, responded affirmatively to the proposal for consideration of fee waivers.
Another proposal was for Baguio to replicate the suspension of amusement tax on local films implemented by other local government units.
The consultation also clarified the tax treatment of events that do not charge admission but allow merchants to sell products. The city government explained that no amusement tax is imposed when there is no admission fee. However, organizers and individual merchants may separately be liable for business taxes depending on the classification of their activities under Tax Ordinance No. 2000-001 and their projected sales. A special business permit may also be required.
Pedro Sawac of the City Accounting Office emphasized that amusement tax is not intended to burden artists and is instead a tax obligation of event organizers covered by the law.
Sawac reported that the city collected around P12 million in amusement tax last year, while this year’s collections had already reached around P8 million as of June. The collections form part of the city’s general fund, which finances government programs and social services.
The consultation provided an avenue for the city government and Baguio’s creative sector to clarify the existing rules while identifying possible local measures and proposed changes in national regulations.
While the city government cannot unilaterally amend exemptions or other provisions contained in national law, the discussions opened the possibility of pursuing changes at the appropriate level, while exploring local mechanisms such as clearer guidance, fee waivers, and assistance for qualified artistic activities. Baguio City – Sangguniang Panlungsod
