Congressman Sigfrido R. Tinga (2nd district, Taguig City) has filed a bill seeking to grant corporate tax breaks and importation privileges to the local film and entertainment industry as well as exempt from amusement tax venue operators showing local films and art and music events featuring local artists.
House Bill No. 3200 is titled 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.
In his explanatory note, Tinga stressed: “The dramatic decrease from over 200 movies produced locally per year to less than 30 is quite a telling sign of the health of the industry.”
He brought up the uncompetitive local environment brought about by the heavy taxation on the industry, including the amusement tax, the value added tax and the corporate income tax.
“The over taxation on their gross income makes it difficult for the industry to compete against better-funded and institutionally supported foreign products,” Tinga explained further.
He reasoned out that 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.
In House Bill 3200, the amusement tax shall not be imposed on locally produced films that feature a predominantly Filipino cast that have been classified by the Movie and Television Review and Classification Board as fit for commercial viewing.
The bill seeks to amend the National Internal Revenue Code to exempt the following transactions from the value added tax: importation of raw materials and equipment by persons engaged in the business of making films and other cinematographic work, for use in producing such films, 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.
Republic Act No. 9640 which lowered amusement taxes to not more than 10 percent of gross receipts from admission fees lapsed into law on May 21, 2009 without the signature of then President Gloria Macapagal-Arroyo.
The Act is a consolidation of House Bill 5624 (passed on February 25, 2009) and Senate Bill 2325 (passed on June 11, 2008).
Republic Act No. 9640 reads in full:
AN ACT AMENDING SECTION 140(A) OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS ‘THE LOCAL GOVERNMENT CODE OF 1991”
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
SECTION 1. Section 140 of Republic ct No. 7160, otherwise known as “The Local Government Code of 1991”, is hereby amended to read as follows
SEC. 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 ten percent (10%) of the gross receipts from admission fees.
(b) In the case if theatres or cinemas, the tax shall first be deducted and withheld by their proprietors, lessees, or operators and paid to the provincial treasurer before the gross receipts are divided between said proprietors, lessees, or operators and the distributors of the cinematographic films.
(c) The holding of operas, concerts, dramas, recitals, painting and art exhibitions, flower shows, musical programs, literary and oratorical
presentation, except pop, rock, or similar concerts shall be exempt from the payment of the tax herein imposed.
(d) The sangguniang panlalawigan may prescribe the time, manner, terms and conditions for the payment of tax. In case of fraud or failure to pay the tax, the sangguniang panlalawigan may impose such surcharges, interests and penalties as it may deem appropriate.
(e) The proceeds from th amusement tax shall be shared equally by the province and the municipality where such amusement places are
The Act was signed by Senate President Juan Ponce Enrile and Speaker of the House Prospero C. Nograles.
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