A bill to exempt local films from amusement taxes and to give corporate tax breaks and certain importation privileges to the local movie industry has been filed at the House of Representatives.
Rep. Sigfrido R. Tinga, second district of Taguig City, said his bill aims to make the local arts and entertainment industry more competitive with necessary tax breaks.
In the bill’s explanatory note, Tinga wrote: “The over-taxation on their gross income makes it difficult for the industry to compete against better-funded and institutionally supported foreign products. In addition, supporting the local film industry by exempting them from the amusement tax, would have very little effect on the government’s financial state, since there currently is hardly any industry to tax anyway.”
House Bill No. 3200 is entitled: AN ACT PROMOTING THE LOCAL ARTS AND ENTERTAINMENT INDUSTRY BY PROVIDING THE LOCAL MOVIE AND FILM INDUSTRY CORPORATE TAX BREAKS AND EXEMPTING VENUE OPERATORS FROM THE PAYMENT OF AMUSEMENT TAX WHEN SHOWING LOCALLY PRODUCED FILMS AND MUSIC EVENTS FEATURING FILIPINO ARTISTS.
Some of the salient provisions of Tinga’s bill are as follows:
“SECTION 3. Section 140 of Republic Act No. 7160, otherwise known as the Local Government Code of 1991, is hereby amended to read as follows:
“SECTION 140. Amusement Tax—(a) The province may levy an amusement tax, to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia and other places of amusement at a rate of not more than thirty percent (30%) of the gross receipts from admission fees, PROVIDED, THAT THIS IMPOSITION SHALL NOT APPLY TO LOCALLY PRODUCED FILMS THAT FEATURE A PREDOMINANTLY FILIPINO CAST, THAT HAVE BEEN CLASSIFIED BY THE MOVIE AND TELEVISION REVIEW AND CLASSIFICATION BOARD (MTRCB) AS FIT FOR COMMERCIAL VIEWING.
“SECTION 109. Exempt Transactions—(1) Subject to the provisions of subsection (2) hereof the following transactions shall be exempt from the value added tax:
IMPORTATION OF RAW MATERIALS AND EQUIPMENT BY PESONS ENGAGED IN THE BUSINESS OF MAKING FILMS AND OTHER CINEMATOGRAPHIC WORK, FOR USE IN PRODUCING SUCH FILMS, INCLUDING BUT NOT LIMITED TO DIGITAL MEDIA, PROVIDED THAT THE BUREAU OF INTERNAL REVENUE SHALL HAVE THE EXCLUSIVE RIGHT TO DETERMINE, AFTER PRIOR CONSULTATION WITH MEMBERS OF THE FILM INDUSTRY,
THE RAW MATERIALS AND EQUIPMENT THAT SHALL BE EXEMPT FROM VALUE ADDED TAX.”