REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT

DILG-NAPOLCOM Center, EDSA corner Quezon Avenue, West Triangle, Quezon City
www.dilg.gov,ph

DILG Legal Opinion No. 28, S. 2014

ATTY. FERNANDO C. CAMPOS 22 JUL 2014

President, Arcontica Investment Corporation (AIC)
Bohol Mansions, No. 43-A Bohol Avenue
South Triangle, Quezon City

Dear Atty. Campos:

This is in reply to your query contained in a letter dated 27 May 2014 to OIC
Executive Director Salvador M. del Castillo of the Bureau of Local Government Finance,
Department of Finance (DOF), raising questions relative to the remittance of collections
from admission fees in duly registered cockpits during ordinary hack fights and derbies in
Dasmarinas City.

You stated in gist that the usual practice in your place, prior to the conversion of
Dasmarinas from municipality into a city, is for the assessed thirty percent (30%) of
amusement taxes from admission fees imposed by cockpits to be remitted to the provincial
government. You also mentioned that there was already a resolution passed by the
Sangguniang Bayan (SB) before, naming the sponsor of derbies for fund raising activities
and authorizing the donation of amusement taxes to that sponsor in your belief that this
strategy constituted a waiver on the liability of using government revenues for private
purposes. Furthermore, you underscore the apprehension that the present operator of
Arcontica Cockpit, after the same was foreclosed by Security Bank, has not been paying the
required amusement taxes to the provincial government especially after your request from
them to provide you with relevant documents' thereto was refused, amidst alleged
representation that the operator is not bothered by the non-securing of Sangguniang
Panlungsod (SP) Resolution because the derbies conducted by them are already covered by
separate Mayor's permit and that the conversion of Dasmarinas into a city has relieved the
SP the duty to transmit Derby Resolutions to the Provincial Board because the City
Treasurer has no more obligation to remit amusement taxes from cockfighting after they
have become city impositions.

Under the present law, an amusement tax is an imposition of the province or city to
the proprietors, lessees or operators of theaters, cinemas, concert halls, circuses, boxing
stadia and other places of amusement at a rate of not more than ten percent (10%) of the
gross receipts from admission fees.2 It forms part of the revenue for the collecting LGU, and
once the receipt is realized, the amount shall be accounted as local fund, unless otherwise
provided by law.3 Also, the law is unequivocal in declaring that proceeds from the
amusement tax shall be shared equally by the province and the municipality where such
amusement places are located. The same rule on equal sharing applies in the case of

Consisting of (a) Sangguniang Panlungsod (SP) Resolution authorizing the holding of derbies for 5 days, and
(b) Mayor's permit in the name of the owner of the cockpit or the operator thereof.
2 Section 1, R.A. 9640.
3 Section 305 (d), R.A. 7160
provinces and cities, unless the city concerned in the meantime has become an independent
component or a highly urbanized city where the amusement tax collected should now
accrue to them. Moreover, the Local Government Code of 1991 interjects that the authority to
issue licenses or permits for business operations in the city belongs to the local chief
executive' while that of authorizing or licensing the establishment, operation, and
maintenance of cockpits including the regulation of cockfighting and commercial breeding of
fighting cocks is a function belonging to the Sangguniang Panlungsod.5

Given the foregoing backdrop, your inquiries on the remittance of collections from
admission fees in Arcontica Cockpit are tempered by the following treatment or
application, namely:

1. The present owner, lessee or operator of the cockpit is liable for the
payment of amusement tax subject to the disposition of equal sharing of the
total collections between the Province of Cavite and Dasmarinas City,
except when the time comes that the latter has obtained the status of an
independent component city (ICC) or a highly urbanized city (HUC) in
which case such collections from amusement taxes are directed accruing in
favor of the ICC or HUC only. Thus, your fear of being assessed the collection
after representing that you are no longer the owner of Arcontica is clearly
unfounded;

2. The conduct of hack derbies in the city is th-e subject of permits by

the city mayor after the corresponding authority or license to maintain,
operate or establish Arcontica cockpit is issued, through proper legislative
measure, by the city council in favor of its present owner or operator.
Fittingly, there is no more need for specific city council resolution for the
conduct of each and every derby and even assuming for the sake of discussion
that each derby is contingent upon such specific resolution of the city
council, the same is not subject of mandatory review by the provincial board
unlike in the case of ordinances or resolutions approving local development
plans and public investment programs enacted by the Sangguniang P
anlungsod ;6

4Sec. 455 (b) (3) (iv) Issue licenses and permits and suspend or revoke the same for any violation of the conditions upon
which said licenses or permits had been issued, pursuant to law or ordinance;

5Section 458 (a) (3) (v) Any law to the contrary notwithstanding, authorize and license the establishment, operation, and
maintenance of cockpits, and regulate cockfighting and commercial breeding of gamecocks: Provided, That existing rights
should not be prejudiced;
6.
 DILG Opinion 14, series of 2010 and Section 56 of the LGC provides for the following rule:
SEC. 56. Review of Component City and Municipal Ordinances or Resolutions by the Sangguniang
Panlalawigan. — (a) Within three (3) days after approval, the secretary to the Sangguniang Panlungsod or
Sangguniang Bayan shall forward to the Sangguniang Panlalawigan for review, copies of approved
ordinances and the resolutions approving the local development plans and public investment programs
formulated by the local development councils.
(b) Within thirty (30) days after receipt of copies of such ordinances and resolutions, the Sangguniang Panlalawigan shall
examine the documents or transmit them to the provincial attorney, or if there be none, to the provincial prosecutor for prompt
examination. The provincial attorney or provincial prosecutor shall, within a period of ten (10) days from receipt of the
documents, inform the Sangguniang Panlalawigan in writing his comments or recommendations, which may be considered by
the Sangguniang Panlalawigan in making its decision
3. The conversion of Dasmarinas from municipality into city did not
obliterate the amusement tax that the province of Cavite has levied among
owners, lessees, or operators of cockpit arenas, or has transformed the same
into a city imposition. The province can still collect the same and direct the
city government to remit its share in accordance with the division provided
under the Local Government Code. Relatively, the only instance when the
city can collect amusement tax on cockpit arena is if it decides to pass a new
ordinance on amusement taxes as cities under the code are allowed to levy
this kind of imposition;

4. Unless you can show in a proper proceeding that you have the right to
compel the new owner or operator of Arcontica cockpit to present
documents (SP resolutions, Deed of Sale or title or evidence of ownership)
relative to its payment of amusement taxes being imposed by the province,
your insistence to have them shown or presented to you does not constitute
justification;

5. Finally, this Department agrees in your position that the failure of

the operator to secure the corresponding valid Mayor's Permit in his name as
owner of the cockpit, and the diversion of the taxes (amusement taxes) due
such owner constitute an impropriety that will make officials
responsible for the lost of valuable taxes liable under the law. This will
nonetheless generate a cause of action that has to be filed in the proper forum
and agency of the government for proper proceedings and eventual redress.

Thank you very much for writing us and we hope to have been able to address your
queries.

Very truly yours

. EDWIN . ENRILE
Undersecretary

(c) If the Sangguniang Panlalawigan finds that such an ordinance or resolution is beyond the power
conferred upon the Sangguniang Panlungsod or Sangguniang Bayan concerned, it shall decrare such
ordinance or resolution invalid in whole or in part. The Sangguniang Panlalawigan shall enter its action in
the minutes and shall advise the corresponding city or municipal authorities of the action it has
taken.
(d) If no action has been taken by the Sangguniang Panlalawigan within thirty (30) days after
submission of such an ordinance or resolution, the same shall be presumed consistent with law and
therefore valid.