Republic of the Philippines
SANGGUNIANG PANLUNGSOD
City Government of Naga

ORDINANCE NO. 2026-098

AN ORDINANCE GRANTING AMUSEMENT TAX EXEMPTION TO CINEMA OPERATORS PARTNERING WITH THE CITY GOVERNMENT OF NAGA IN PROVIDING FREE MOVIES TO SENIOR CITIZENS AND PERSONS WITH DISABILITIES (PWDs), AND FOR OTHER PURPOSES

Principal Authors: Hon. FRANCISCO M. MENDOZA, Hon. GILDA GAYLE R. ABONAL-GOMEZ
Co-Author: Hon. ELMER S. BALDEMORO
Co-Sponsors: Hon. ALTHEA YSABEL J. REYES, Hon. KYSHIE GABRIELLE D. REGALADO, Hon. LAWRENCE JETHRO BERMUNDO

EXPLANATORY NOTE

Ordinance No. 2020-072 (Persons with Disabilities Code of Naga City) and Ordinance No. 2022-049 (2022 Revised Consolidated Senior Citizens Ordinance) institutionalized various benefits for Naga City senior citizens and persons with disabilities (PWDs), including free movies once a week. For several years now, the city government periodically entered into Memoranda of Agreement (MOA) with cinema operators to operationalize this free movie privilege. After deducting the 20% discount, the MOA divided the remaining 80% between the city government and the cinema operator at 40% each.

Under the city’s local revenue code, the cinema operator is liable for amusement tax on the forty percent (40%) it receives from the city government and the same remains due and demandable. The cinema operator however recently sought the waiver of this tax considering the already significant reduction in the ticket price totaling 60% made up of the 20% mandatory discount and the 40% additional discount from the cinema operator.

The city government took cognizance of the significant savings it realized from the discount of the cinema operator and the latter’s need to recoup its operating expenses. The city therefore finds basis to grant the request by way of an amusement tax exemption.

Section 192 of the Local Government Code of 1991 (Republic Act No. 7160) explicitly empowers local government units to grant tax exemptions, incentives, or reliefs through duly approved ordinances. It reads:

SECTION 192. AUTHORITY TO GRANT TAX EXEMPTION PRIVILEGES. — Local government units may, through ordinances duly approved, grant tax exemptions, incentives or reliefs under such terms and conditions as they may deem necessary.

Thus, this ordinance.

NOW, THEREFORE, be it ordained by the Sangguniang Panlungsod of the City of Naga, that:

SECTION 1. SHORT TITLE.

This Ordinance shall be known and cited as the “Senior Citizens and PWD Cinema Amusement Tax Exemption Ordinance.”

SECTION 2. DECLARATION OF POLICY.

It is hereby declared the policy of the City Government of Naga to promote the social wellness and mental well-being of its registered senior citizens and PWDs by providing them with, among others, recreational opportunities in partnership with local cinema operators. In this regard, the city government may extend incentives and tax exemptions to such cinema operators to encourage their participation.

SECTION 3. COST-SHARING AND DISCOUNT SCHEME.

To fully operationalize the free movie privilege granted under Section 3(a)(3) of Ordinance No. 2022-049 and Section 52 of Ordinance No. 2020-072, the ticket price for each eligible senior citizen or PWD shall be allocated and absorbed as follows:

• a. Mandatory Statutory Discount: A discount of twenty percent (20%) of the regular admission ticket price shall be applied pursuant to Republic Act No. 7432 and Republic Act No. 7277, both as amended, granting benefits to seniors and PWDs respectively.
• b. Cinema Operator Discount: The participating cinema operator shall grant a voluntary additional discount of at least forty percent (40%) of the ticket price.
• c. City Government Counterpart: The balance of the ticket price remaining after deducting the mandatory statutory discount (20%) and the cinema operator discount (at least 40%) shall be shouldered in full by the City Government and paid to the cinema operator.
• d. Beneficiary Share: Zero. Movie admission shall be entirely free to qualified senior citizens and PWDs.

SECTION 4. GRANT OF AMUSEMENT TAX EXEMPTION.

A cinema operator extending the free movie benefit to seniors and PWDs thru the grant of additional discount as per Section 3b herein shall be exempt from the payment of the ten percent (10%) amusement tax on the total amount of City Government Counterpart it received from the city government. The Cinema Operator Discount and the Mandatory Statutory Discount, not being in the nature of gross receipts, are not subject to tax.

SECTION 5. CONTINUING AUTHORITY OF THE CITY MAYOR TO ENTER INTO MOA.

The City Mayor is herein granted continuing authority to negotiate and enter into a Memorandum of Agreement (MOA) with a cinema operator for the grant of the free movie privilege subject to the provision of this Ordinance and of Ordinance Nos. 2020-072 and 2022-049.

SECTION 6. CONDITIONS FOR TAX EXEMPTION.

The grant of amusement tax exemption shall be subject to the following conditions:

• a. The cinema operator must have a valid Mayor’s Permit upon entering into, and for the duration of, the Memorandum of Agreement.
• b. The free movie privilege must be extended only to qualified senior citizens and PWDs of Naga City as evidenced by their valid Identification Cards issued by the Office of the Senior Citizens Affairs (OSCA) and the Persons with Disability Affairs Office (PDAO).
• c. The amusement tax exemption shall only be for the gross receipts derived from the City Government Counterpart arising from the free movies availed by seniors and PWDs and such free movie privilege shall only be granted in accordance with the preceding subsection and the terms and conditions of a Memorandum of Agreement.
• d. The claim for amusement tax exemption shall be supported by a duly signed and notarized MOA and the amount shall be authenticated by the City Treasurer’s Office based on the Official Receipts issued by the cinema operator for the City Government Counterpart.
• e. Any falsification, overstatement, misuse, or fraudulent claim of exemption shall be ground for cancellation of the exemption, assessment of deficiency taxes, and imposition of applicable surcharges, interests and penalties under the Revenue Code of Naga City and other applicable laws and ordinances.

SECTION 7. LIMITATION.

Nothing in this Ordinance shall be construed to exempt a participating cinema operator from the payment of Mayor’s Permit fees, business taxes, regulatory fees, garbage fees, or other lawful impositions under the Revenue Code of Naga City, except as expressly provided herein with respect to amusement tax on the gross receipts from the City Government Counterpart as herein defined.

SECTION 8. OPEN TO ALL CINEMA OPERATORS IN NAGA CITY.

Any cinema operator located in Naga City may offer to participate in the program and avail of the amusement tax exemption. However, for ease of monitoring and expeditious processing of payments, only one cinema operator may be engaged by the city government at any given period. Likewise, total cost to the city and ease of access by seniors and PWDs shall be key considerations.

SECTION 9. IMPLEMENTING OFFICES AND GUIDELINES.

The City Treasurer’s Office, the City Accounting Office, OSCA and PDAO are hereby directed to coordinate among themselves for the proper implementation of this Ordinance. They may jointly formulate implementing guidelines, subject to approval by the City Mayor, for the accurate tracking and accounting of the free movie privilege and the corresponding amusement tax exemption, as well as the timely remittance of payment to the cinema operator.

SECTION 10. SEPARABILITY CLAUSE.

If any provision, section, or part of this Ordinance is declared unconstitutional or invalid by a court of competent jurisdiction, the remaining provisions, sections, or parts thereof shall continue to be in full force and effect.

SECTION 11. REPEALING CLAUSE.

All ordinances, resolutions, executive orders, rules, and regulations, or parts thereof, which are inconsistent or in conflict with the provisions of this Ordinance are hereby repealed, amended, or modified accordingly.

SECTION 12. EFFECTIVITY.

This Ordinance shall take effect ten (10) days after posting in the bulletin board at the entrance of city hall and publication for three consecutive days in a newspaper of local circulation.

ENACTED: September 8, 2026.

WE HEREBY CERTIFY to the correctness of the foregoing ordinance.

GABRIEL H. BORDADO JR.

City Vice Mayor & Presiding Officer

LILIAN O. PASCUAL

Acting Secretary to the Sangguniang Panlungsod

APPROVED:

MARIA LEONOR G. ROBREDO

City Mayor