Mar 17
FAP BATS FOR 10% AMUSEMENT TAX by fapweb  |  Posted in Articles  |  on Fri, Mar 17, 2006

The Film Academy of the Philippines is supporting a move by members of both Houses of Congress to reduce the amusement tax on films from 30% to 10%. Bills have been introduced in both chambers in an effort to arrest the alarming downtrend in the production of local films.

Taxes imposed on films in the country are said to be the highest film taxes in the world, the FAP stressed. A position paper on this matter, signed by FAP Chairman Atty. Espiridion Laxa and Director General Leo G. Martinez, were submitted to Senators Ramon ‘Bong’ Revilla Jr., Lito Lapid and Jinggoy Estrada, the sponsors of the Senate bill, and Rep. Prospero Pichay, the sponsor of the House bill.

The position paper is hereunder reprinted in whole:

POSITION PAPER OF THE FILM ACADEMY OF THE PHILIPPINES ON THE REDUCTION OF AMUSEMENT TAX ON FILMS FROM 30% TO NOT MORE THAN 10%

The Filipino Film Industry has been succumbing to over taxation since 1996 when movie producers were required to start paying 10% VAT on their film shares on top of the 30% amusement tax collected from the gross receipts of their films. Thus, making the taxes imposed on films in the Philippines the highest film taxes in the world.

In support of this assertion, we attach hereto a comparative schedule of film taxes throughout the world. Correlative to this assertion is the information that in 90% of countries in the world where there is VAT there is no amusement tax.

Beginning in 1996, the local film industry has been down trending in its annual output in the following crippling scales:

From 1996-1999 the average number of Filipino films produced yearly was 162.

Starting from 2000-2003 the average annual productions nosedived to 80 films!

In 2004, only 53 films were produced and, in 2005, 60 films were finished and exhibited.

The increase of VAT on film shares from 10% to 12% starting February this year will further cripple the Filipino film industry.

If and when the cinema owners/operators would be required to pay 12% VAT like the movie producers, the so-called-dying movie industry may finally bid us farewell.

This bleak scenario darkening the horizon for our film industry is beginning to exude some rays of hope described as follows:

1. Announcement of Pres. Macapagal Arroyo that she supports the passage of a law to reduce the amusement tax on film from 30% to 10% on gross receipts.

2. The introduction of Senate Bill No. 2158 by Senators Revilla, Lapid and Estrada to reduce the amusement tax from 30% to not more than 10% on gross receipts.

3. The introduction of House Bill No. 4966 by Congressman Prospero Pichay to reduce the amusement tax on film from 30% to not more than 10% on gross receipts of ticket sales.

The thousands of artists, technicians and workers in the Filipino film industry are hoping and praying that a law be passed in the soonest possible time reducing the amusement tax from 30% to not more than 10% on gross receipts of ticket sales.

Only such a law can save the Filipino film industry from DYING.

Certainly, our film industry deserves such a law if only to recognize it as an essential industry and as an effective educational and cultural instrument of our country in propagating moral values and helping teach and popularize our national language, Tagalog, among other national objectives and achievements.