Section 12Sec./Art. 12

Franchise Tax. The grantee, its successors or assigns, shall be liable to pay the same taxes on their real estate, buildings and personal property, exclusive of this franchise, as other persons or corporations are now or hereafter may be required by law to pay. In addition thereto, the grantee, its successors or assigns, shall pay a franchise tax equal to twenty-five per centum (25%) of its gross earnings from the horse races authorized under this franchise which is equivalent to the eight and one-half per centum (8 1/2%) of the total wager funds or gross receipts on the sale of betting tickets during the racing days as mentioned in Section 9 hereof, allotted as follows:

(a) Five per centum (5%) for the national government;

(b) Five per centum (5%) for the province or city/municipality where the racetrack is located;

(c) Seven per centum (7%) for the Philippine Charity Sweepstakes Office;

(d) Six per centum (6%) for the Philippine Anti-Tuberculosis Society; and

(e) Two per centum (2%) for the "Water for Life" project of the Department of Health.

The grantee shall file the return with, and pay the taxes due thereon to the Commissioner of Internal Revenue or his duly authorized representatives in accordance with the National Internal Revenue Code and the return shall be subject to audit by the Bureau of Internal Revenue.