OWWA MEMORANDUM OF INSTRUCTIONS NO. 018, S. 1995

: An 18% amusement tax is imposed under Section 125(b) of the Philippine Tax Code.
: Proprietors, lessees, or operators of cabarets, night or day clubs, and similar amusement places are liable to pay the amusement tax.
: Night and day clubs are defined as drinking, dancing, and entertainment venues which often also serve food and provide entertainment.
: Cabarets are restaurants or clubs where liquor and food are served, with a stage provided for performances by musicians, dancers, or comedians, including a venue for dancing by patrons/customers.
: Yes, videoke bars, karaoke bars, karaoke television, karaoke boxes, and music lounges are deemed subject to the 18% amusement tax under Section 125(b).
: They are subject to the 18% amusement tax and not the 12% VAT on gross receipts.
: The legal basis is Section 125(b) of the National Internal Revenue Code of 1997, as amended, which imposes an 18% amusement tax on proprietors, lessees, or operators of such amusement places.
: Modern forms include videoke bars, karaoke bars, karaoke television, karaoke boxes, and music lounges that provide facilities for patron singing and entertainment.
: Amusement places provide pleasurable diversion through entertainment, which can include music, dancing, performances, and interactive singing facilities.
: It was adopted on March 1, 2010.