Manila Mayor Alfredo S. Lim has approved the recommendation of City Legal Officer Renato G. de la Cruz to remit directly to the Film Academy of the Philippines its 20 percent share on the 25 centavo cultural development tax collected by movie houses for admission tickets in the City of Manila.
In a meeting with FAP officials headed by Director General Leo G. Martinez and Chairman Espiridion Laxa last Tuesday, June 8, Mayor Lim approved the recommendation of the city legal officer to remit the FAP share from the cultural tax beginning January this year.
The mayor even ordered that the remittance of the FAP share must be pushed further retroactively to the year 1992—the year the local government units stopped remitting the proceeds of the cultural tax to the then Metropolitan Manila Commission.
Director General Martinez wrote a letter to the City of Manila requesting the resumption of the remittance of the Academy’s share on the cultural tax.
The MMC passed an ordinance in 1979 setting up the Cultural Development Fund to be derived from the 25 centavo levy on all admission tickets of movie houses in Metro Manila. Amendatory MMC Ordinance 84-03 allocated the proceeds from the cultural development tax as follows: 30% to the Cultural Center of the Philippines; 20% to the Film Academy of the Philippines; 20% to the Experimental Cinema of the Philippines and 30% to be retained by MMC.
The MMC remitted the funds to the beneficiaries for several years but with the enactment of the Local Government Code in 1992, the MMC declared that government units were to remit the shares directly to the beneficiaries. The last remittance to beneficiaries was in May, 1985.
But it appears that since January 1992, the local government units stopped remitting the cultural tax to the MMC even if the cultural development tax continued to be collected by movie houses.
In ruling on the issue whether the City of Manila must remit the share of the FAP, City Legal Officer de la Cruz ruled in the affirmative.
In his letter to Mayor Lim, Atty. de la Cruz stated: “While it is true that the cultural tax was imposed by the defunct MMC, the obligation of movie houses to pay continued and continues to date, and the sharing arrangement among the beneficiaries named in MMC Ord. No. 84-03 remained the same in the absence of a repealing statute of law.
“More important, even RA No. 7160 (Local Government Code) has not repealed the said MMC Ord. No. 84-03.
“True, Sec. 140 of the Local Government Code imposes an amusement tax of 30% on gross receipts from admission fees. However, the cultural development tax under the MMC ordinance is different in that, it is a P.25 fixed tax on
admission tickets regardless of their costs.”
Martinez said that with the favorable ruling and action of Mayor Lim and his legal officer, the FAP will be able to convince other cities and towns of Metropolitan Manila to remit the Academy’s share of the cultural tax. “Hopefully, retroactive also to 1992,” Martinez added.