The possibility of the reduction of the amusement tax to 10 percent or even lower cropped up during the Senate’s committee on ways and means hearing chaired by Sen. Francis G. Escudero and attended by FAP officials and film industry leaders to discuss two pending bills envisioned to revive the ailing local film industry last Tuesday, October 16.
Director William Mayo, member of the board of governors of the Film Academy of the Philippines, reported to FAP Director General Leo G. Martinez that there is even a possibility that the amusement tax is scrapped altogether.
He added that the committee hearing came up with the decision to peg the amusement tax to just ten percent or even lower.
The hearing—held at the Sen. Recto Room, 2nd floor of the Senate building in Pasay City—tackled Senate Bills Nos. 4 and 71 which were introduced by Senators Jinggoy Ejercito Estrada and Loren Legarda, respectively.
During the hearing, the committee also considered another film-related bill introduced by Sen. Ramon ‘Bong’ Revilla Jr. that seeks to reduce the amusement tax from 30 to 10 percent.
Sen. Legarda’s bill is described as “An Act Exempting the Philippine Film and Movie Industry from the Payment of Certain Taxes, Amending for the Purpose Certain Provisions of the Local Government Code of 1991, the National Internal Revenue Code of the Philippines, and for Other Purposes” while Sen. Estrada’s bill is titled “An Act Reviving the Philippine Movie Industry by Providing Incentives to the Proprietors, Lessees, Operators of Theaters and Cinemas.”
For Senate Bill 71, Sen. Legarda stated in her explanatory note that one major reason for the continuing weakening of the Philippine film industry is heavy taxation. The lady senator’s proposed bill aims to exempt producers of films classified as general patronage and parental guidance-13 from the payment of amusement tax imposed by the local governments. The bill also exempts producers from payment of value-added tax on the importation of raw materials and equipment to be used in making films and other cinematographic works.
Senate Bill 4 provides that, “Except for real property tax on land, no local and national taxes as prescribed under Republic Act. No. 8424, also known as the “National Internal Revenue Code of 1977, as Amended” (such as income tax, excise tax and value-added tax) and under Republic Act. No. 7160, also known as the “Local Government Code of 1991” (such as amusement tax), shall be imposed on proprietors, lessees, operators of theaters and cinemas in relation to the showing or exhibition of movies and films produced by the Philippine movie industry”. Meanwhile, Senate President Manuel Villar also filed Senate Bill 1637 seeking to encourage the production of outstanding world-class Filipino films by providing incentives to producers, filmmakers and performers who win top prizes in global film competitions and festivals.
Senate President Villar descibed his bill as another effort to resusictate the ailing movie industry. Under the bill, Filipino films that garner best film awards or prizes (or their equivalent) as well as those winning in categories for technical excellence will be entitled to several incentives.
These include a P5 million grant to the production outfit that produced the film and P2 million grants for those Filipino film artists and technicians who win awards as directors, performers, scriptwriters, cinematographers, production designers and other categories.
The award-winning film will also get an automatic A ratng from the Cinema Evaluation Board which will entitle it to tax rebates.
Sen. Villar explained in his introduction: “This legislation seeks to encourage and promote the dynamism and competitiveness of Philippine films and motion pictures and recognizes the achievements of filmmakers, actors nd other members of the cinema industry who contiribute to the elevaton of the nation’s artistic heritage.”
The bill also seeks to create a P50 million special fund to be used for the incen-tives for the local film industry which will be sourced from the Philippine Amuse-ment & Gaming Corporation.