NIRC Section 125 Amusement Tax: Cockpits, Cabarets, Boxing, Basketball, and Jai-Alai

Section 125 of the National Internal Revenue Code (NIRC) imposes a national amusement tax that the BIR—not a city or municipality—collects from operators of cockpits, cabarets, boxing exhibitions, professional basketball games, and jai-alai or race tracks. The rate varies by venue: 18% for cockpits and cabarets, 10% for boxing (with a narrow championship exemption), 15% for professional basketball, and 30% for jai-alai and race tracks, on gross receipts.

National amusement tax vs. local amusement tax #

Section 125’s amusement tax is a national internal revenue tax collected by the BIR — a completely different tax from the local amusement tax that cities and municipalities separately impose on cinemas and theaters under the Local Government Code, using different rates, forms, and collecting offices. Confusing the two is one of the most common mistakes in Philippine amusement-tax questions.

A movie theater pays the LGU’s local amusement tax, not the Section 125 national tax; a cockpit operator pays the BIR’s national tax, not the LGU’s cinema-style local tax. A venue running both a cinema and a jai-alai fronton could owe both — on separate revenue streams, to separate authorities.

Which venues and rates does Section 125 cover? #

Section 125 lists five categories of amusement places and assigns each a specific national percentage tax rate on gross receipts, ranging from 10% for boxing exhibitions up to 30% for jai-alai and race tracks, with cockpits, cabarets, and basketball falling in between. “Gross receipts” here covers all receipts of the operator, including television, radio, and motion picture rights income tied to the event — not just gate ticket sales.

The boxing exemption: when does 10% not apply? #

A professional boxing exhibition is exempt from the 10% national amusement tax only when it satisfies all three conditions Section 125 sets out together — the championship stake, the Filipino-contender requirement, and the Filipino-ownership requirement for the promoter — and not for any other type of “big fight” promotion. Missing any single condition keeps the promotion inside the taxable 10% bracket.

The operative statutory text reads:

“(c) Ten percent (10%) in the case of boxing exhibitions: Provided, however, That boxing exhibitions wherein World or Oriental Championships in any division is at stake shall be exempt from amusement tax: Provided, further, That at least one of the contenders for World or Oriental Championship is a citizen of the Philippines and said exhibitions are promoted by a citizen/s of the Philippines or by a corporation or association at least sixty percent (60%) of the capital of which is owned by such citizens.”

In plain terms: (1) a World or Oriental Championship title is actually at stake; (2) at least one contender is a Philippine citizen; and (3) the promoter is Filipino, or a corporation at least 60% Filipino-owned. Fail any one prong and the bout stays taxable at 10%.

Which BIR form reports the amusement tax? #

Operators subject to the Section 125 amusement tax file BIR Form 2551Q, the Quarterly Percentage Tax Return, the same form used for most other percentage taxes under Title V of the NIRC, rather than a specialized amusement-only return. Each category reports under its own Alphanumeric Tax Code (ATC) line — cockpits generally under ATC PT140, cabarets/similar establishments under PT150. ATC assignments can be revised in newer form versions, so confirm the current line and deadline for a specific venue with the BIR before filing. Section 125 sits within Title V of the NIRC alongside the carrier, bank, and insurance percentage taxes covered in Percentage Tax on Common Carriers, Banks, and Insurance Companies, and the broader VAT-versus-percentage-tax question covered in VAT vs. Percentage Tax in the Philippines.

Worked example: amusement tax on a boxing promotion #

A boxing promoter computes the 10% amusement tax on the full gross receipts of the promotion — tickets plus any broadcast or media rights income — unless the promotion independently satisfies all three exemption conditions the statute requires together.

A domestic promotions company stages a professional boxing card in Manila with these gross receipts for the quarter:

Scenario A — non-title undercard. The main event is a 10-round non-title bout with no championship at stake. Even though the promoter is 100% Filipino-owned and both boxers are Filipino, the exemption does not apply because no World or Oriental Championship is on the line:

• ₱10,000,000 × 10% = ₱1,000,000 amusement tax due, reported via BIR Form 2551Q under the boxing-exhibition ATC line.

Scenario B — Oriental title fight, all three conditions met. The same promoter stages an Oriental welterweight title bout; one contender is Filipino and the promotions company is 100% Filipino-owned. All three conditions are satisfied, so the ₱10,000,000 in gross receipts is exempt — tax due is ₱0, though the promoter should keep the sanctioning body’s title designation and ownership records in case the BIR examines that quarter’s 2551Q.

Scenario C — same fight, foreign-majority promoter. If the promotions company were only 40% Filipino-owned instead, the promoter condition fails and the full ₱1,000,000 becomes due despite the other two conditions being met — ownership structure alone can flip a promotion from exempt to a seven-figure tax bill.

Frequently asked questions #

Is amusement tax a national tax or a local tax in the Philippines? #

Both exist, on different venues. The national amusement tax under NIRC Section 125 is collected by the BIR from cockpits, cabarets, boxing exhibitions, professional basketball games, and jai-alai/race tracks. The local amusement tax under the Local Government Code is imposed by LGUs on theaters, cinemas, concert halls, and circuses, capped at 10% of gross receipts. A cinema does not pay the Section 125 national tax, and a cockpit does not pay the LGU cinema tax.

What is the amusement tax rate for cockpits under Section 125? #

Section 125 of the NIRC imposes an 18% amusement tax on the gross receipts of cockpits, collected by the BIR from the proprietor, lessee, or operator.

Are boxing exhibitions always subject to the 10% amusement tax? #

No. The default rate is 10% of gross receipts, but Section 125 exempts a bout when a World or Oriental Championship is at stake, at least one contender is a Philippine citizen, and the promoter is a Filipino citizen or a corporation at least 60% Filipino-owned. Missing any one condition keeps the promotion taxable at 10%.

Which BIR form reports the Section 125 amusement tax? #

Operators covered by Section 125 report and pay the tax through BIR Form 2551Q, the Quarterly Percentage Tax Return, using the Alphanumeric Tax Code assigned to their category — for example PT140 for cockpits and PT150 for cabarets and similar establishments.

Why is professional basketball taxed at a different rate than boxing? #

Section 125 sets professional basketball games at 15% of gross receipts, imposed in lieu of all other percentage taxes of whatever nature that would otherwise apply. Boxing, by contrast, is taxed at 10% without that in-lieu-of language, and cockpits and cabarets are taxed higher still, at 18%.

Summary #

Section 125 of the NIRC is a national amusement tax the BIR collects directly from operators of cockpits (18%), cabarets/night or day clubs (18%), boxing exhibitions (10%, with a narrow championship exemption), professional basketball games (15%, in lieu of other percentage taxes), and jai-alai/race tracks (30%) — distinct from the local amusement tax LGUs impose on cinemas and theaters. Operators report and remit quarterly through BIR Form 2551Q under the ATC line for their venue category. The boxing exemption only applies when all three conditions — championship, contender citizenship, promoter ownership — are satisfied together, as the worked example shows: get any one wrong and the full 10% applies to the entire gross receipts.