To help the film and music industries recover from the effects of the pandemic, Senator Robin Padilla filed a bill to exempt Filipino-owned local productions from paying amusement tax, and to grant tax holidays to the two industries.
Padilla, a veteran of the movie industry, noted in his Senate Bill 2048 (The Film and Live Events Recovery Act) that amusement tax laws impede the growth of the entertainment industry and drive up the cost of amusement services.
“It is imperative to give our film and music industries the necessary boost to thrive and recover from the pandemic.”
“Hence, it is imperative to give our film and music industries the necessary boost to thrive and recover from the pandemic and new challenges that cost them major losses while ensuring that the gains redound to local productions, thereby benefiting our people and economy,” the legislator said in his bill.
The bill exempts from amusement tax all locally produced creative materials which copyright is owned by Filipinos and from local productions with at least 10% equity owned by Filipinos. It also grants the film and music industries a tax holiday of two years. The bill likewise lowers the cap for amusement tax collection under the Local Government Code to five percent from the current 10 percent.
In his bill, the lawmaker lamented the taxation on filmmakers and producers is “restrictive and burdensome” to the detriment of our labor productivity, cultural exhibition and local development.
“The existing taxes require the films to gross 270% of production costs to just break even.”
The senator noted none of the locally produced films in 2022 hit P10 million in gross sales, adding the existing taxes require the films to gross 270% of production costs to just break even.
The bill exempts from paying amusement taxes locally produced film productions, musical plays, operas, concerts, dramas, recitals, painting and art exhibitions, flower shows, musical programs, and literary and oratorical presentations – provided that the copyright of such locally produced work is owned by Filipino/s and that at least 10% of the equity of such local productions is owned by Filipinos as certified by the Department of Trade and Industry or the Securities and Exchange Commission.
Proceeds from the amusement tax shall be allocated for programs, activities and projects in the sectors and industries involving the locally produced work. The remaining proceeds shall be shared equally by the province and municipality where the amusement places are located.
Within two years from the effectivity of the measure, the power of local governments to levy an amusement tax is suspended with an extendible period of at least two years subject to the approval of the Department of Finance.
