Nature and term of franchise.
SEC. 10. Nature and term of franchise. — Subject to
the terms and conditions established in this Decree, the Corporation is hereby
granted for a period of twenty-five (25) years, renewable for another
twenty-five (25) years, the rights, privilege and authority to operate and
maintain gambling casinos, clubs, and other recreation or amusement places,
sports, gaming pools, i.e. basketball, football, lotteries, etc. whether on land
or sea, within the territorial jurisdiction of the Republic of the
Philippines.
Scope of Franchise.
SEC. 11. Scope of Franchise. — In addition
to the rights and privileges granted it under the preceding Section, this
Franchise shall entitle the Corporation to do and undertake the following:
Enter into operating and/or management contracts with any registered and
accredited company possessing the knowledge, skill, expertise and facilities to
insure the efficient operation of gambling casinos; provided, that the
service fees of such management and/or operator companies whose services may be
retained by the Corporation shall not in the aggregate exceed ten (10%) percent
of the gross income;
Purchase foreign exchange that may be required for the importation of
equipment, facilities and other gambling paraphernalia indispensably needed or
useful to insure the successful operation of gambling casinos;
Acquire the right of way or access to or thru public land, public waters or
harbors, including the Manila Bay Area; such right shall include but not be
limited to the right to lease and/ or purchase public lands, government
reclaimed lands, as well as lands of private ownership or those leased from the
Government. This right shall carry with it the privilege of the Corporation to
utilize piers, quays, boat landings, and such other pertinent and related
facilities within these specified areas for use as landing, anchoring or
berthing sites in connection with its authorized casino operations;
Build or construct structures, buildings castways, piers, decks, as well as
any other form of landing and boarding facilities for its floating casinos; and
To do and perform such other acts directly related to the efficient and
successful operation and conduct of games of chance in accordance with existing
laws and decrees.
Special Condition of Franchise.
SEC. 12. Special Condition of Franchise. — After
deducting five (5%) percent as Franchise Tax, the Fifty (50%) percent share of
the Government in the aggregate gross earnings of the Corporation from this
Franchise shall be immediately set aside and allocated to fund the following
infrastructure and socio-civic projects within the Metropolitan Manila Area:
Flood Control
Sewerage and Sewage
Nutritional Control
Population Control
Tulungan ng Bayan Centers
Beautification
Kilusang Kabuhayan at Kaunlaran (KKK) projects; provided, that
should the aggregate gross earning be less than P150,000,000.00, the amount to
be allocated to fund the above-mentioned project shall be equivalent to sixty
(60%) percent of the aggregate gross earning.
In addition to the priority infrastructure and socio-civic projects within
the Metropolitan Manila specifically enumerated above, the share of the
Government in the aggregate gross earnings derived by the Corporate from this
Franchise may also be appropriated and allocated to fund and finance
infrastructure and/or socio-civic projects throughout the Philippines as may be
directed and authorized by the Office of the President of 'he Philippines.
Exemptions.
SEC. 13. Exemptions. —
Customs duties, taxes and other imposts on importations. — All
importations of equipment, vehicles, automobiles, boats, ships, barges, aircraft
and such other gambling paraphernalia, including accessories or related
facilities, for the sole and exclusive use of the casinos, the proper and
efficient management and administration thereof, and such other clubs,
recreation or amusement places to be established under and by virtue of this
Franchise shall be exempt from the payment of all kinds of customs duties, taxes
and other imposts, including all kinds of fees, levies, or charges of any kind
or nature, whether National or Local.
Vessels and/or accessory ferry boats imported or to be imported by any
corporation having existing contractual arrangements with the Corporation, for
the sole and exclusive use of the casino or to be used to service the operations
and requirements of the casino, shall likewise be totally exempt from the
payment of all customs duties, taxes and other imposts, including all kinds of
fees, levies, assessments or charges of any kind or nature, whether National or
Local.
Income and other taxes. — (a) Franchise Holder: No tax of any kind
or form, income or otherwise, as well as fees, charges or levies of whatever
nature, whether National or Local, shall be assessed and collected under this
Franchise from the Corporation; nor shall any form of tax or charge attach in
any way to the earnings of the Corporation, except a Franchise Tax of five (5%)
percent of the gross revenue or earnings derived by the Corporation from its
operation under this Franchise. Such tax shall be due and payable quarterly to
the National Government and shall be in lieu of all kinds of taxes, levies, fees
or assessments of any kind, nature or description, levied, established or
collected by any municipal, provincial, or national government authority.
(b) Others: The exemption herein granted for earnings derived from the
operations conducted under the franchise specifically from the payment of any
tax, income or otherwise, as well as any form of charges, fees or levies, shall
inure to the benefit of and extend to corporations(s), associations(s),
agency(ies), or individuals) with whom the Corporation or operator has any
contractual relationship in connection with the operations of the casino(s)
authorized to be conducted under this Franchise and to those receiving
compensation or other remuneration from the Corporation or operator as a result
of essential facilities furnished and/or technical services rendered to the
Corporation or operator.
The fee or remuneration of foreign entertainers contracted by the Corporation
or operator in pursuance of this provision shall be free of any tax.
Dividend Income. — Notwithstanding any provision of law to the
contrary, in the event the Corporation should declare a cash dividend, that
portion of the dividend income corresponding to the participation of the private
sector shall, as an incentive to the beneficiaries, be subject only to a final
income tax rate of ten (10%) percent in lieu of the regular income tax rates.
The dividend income shall not in such case be considered as part of
beneficiaries' taxable income; provided, however, that such dividend
income shall be totally exempted from income or other forms of taxes if invested
within six (6) months from the date the dividend income is received, in the
following:
(a) operation of the casino(s) or investments in any affiliate activity that
will ultimately redound to the benefit of the Corporation or any other
corporation with whom the Corporation has any existing arrangements in
connection with or related to the operations of the casino(s);
(b) Government bonds, securities, treasury notes, or debentures; or
(c) BOI — registered or export-oriented corporation(s).
Utilization of Foreign Currencies. — The Corporation shall have the
right and authority, solely and exclusively in connection with the operations of
the casino(s), to purchase, receive, exchange and disburse foreign exchange,
subject to the following terms and conditions:
(a) A specific area in the casino(s) or gaming pit shall be put up solely and
exclusively for players and patrons utilizing foreign currencies;
(b) The Corporation shall appoint and designate a duly accredited commercial
bank agent of the Central Bank, to handle, administer and manage the use of
foreign currencies in the casino(s);
(c) The Corporation shall provide an office at casino(s) exclusively for the
employees of the designated bank, agent of the Central Bank, where the
Corporation shall maintain a dollar account which will be utilized exclusively
for the above purpose and the casino dollar treasury employees;
(d) Only persons with foreign passports or certificates of identity (for Hong
Kong patron only) duly issued by the government or country of their residence
will be allowed to play in the foreign exchange gaming pit;
(e) Only foreign exchange prescribed to form part of the Philippine
International Reserve and the following foreign exchange currencies: Australian
Dollar, Singapore Dollar, Hong Kong Dollar, shall be used in this gaming
pit;
(f) The disbursement, administration, management and recording of foreign
exchange currencies used in the casino(s) shall be carried out in accordance
with existing foreign exchange regulations; and periodical reports of the
transactions in such foreign exchange currencies by the Corporation shall be
duly recorded and reported to the Central Bank thru the designated Agent Bank;
and
(g) The Corporation shall issue the necessary rules and regulations for the
guidance and information of players qualified to participate in the foreign
exchange gaming pit, in order to make certain that the terms and conditions as
above set forth are strictly complied with.
Other Conditions.
SEC. 14. Other Conditions. —
Place. — The Corporation shall conduct the gambling activities or
games of chance on land or water within the territorial jurisdiction of the
Republic of the Philippines. When conducted on water, the Corporation shall have
the right to dock the floating casino(s) in any part of the Philippines where
vessels/boats are authorized to dock under the Customs and Maritime Laws.
Time. — Gambling activities may be held and conducted at anytime of the day
or night; provided, however, that in places where curfew hours are
observed, all players and personnel of the gambling casinos shall remain within
the premises of the casinos.
Persons allowed to play. —
(a) Tourist and/or foreigners who are not residents of the
Philippines;
(b) Residents with a gross income for the previous year of at
least P50,000.00, which fact shall be certified to by the Bureau of Internal
Revenue; and
(c) The number of guests of the above-mentioned qualified
persons shall be limited to two (2) only; provided, that the said
guests are at least 21 years of age;
Persons not allowed to play. —
(a) Government officials connected directly with the operation of the
Government or any of its agencies;
(b) Members of the Armed Forces of the
Philippines, including the Army, Navy, Air Force or Constabulary; and
(c)
Persons under 21 years of age or students of any school, college or university
in the Philippines.
From these are excepted the personnel employed by the casinos, special
guests, or those who at the discretion of the Management may be allowed to stay
in the premises.
Operation of related services. — The Corporation is authorized to
operate such necessary and related services, shows and entertainment. Any income
that, may be realized from these related services shall not be included as part
of the income of the Corporation for the purpose of applying the franchise tax,
but the same shall be considered as a separate income of the Corporation and
shall be subject to income tax.
