27, 2014

NR # 3390

Solon seeks 5-year tax holiday for moribund local film industry
A lawmaker is seeking a five-year tax holiday for the local film industry to help it recover and be more competitive, especially with the entry of foreign players. Rep. Jose Atienza Jr. !arty-list, "uhay# raised the proposal through $ouse "ill %&'( which seeks to amend Republic Act )*+,, otherwise known as -An Act .reating the /ilm 0evelopment .ouncil of the !hilippines1 to provide a tax holiday to the local movie industry. Atienza said the country2s film industry is moribund, citing that it used to produce an average of %(( films a year, which dropped to less than 3( films a year. -4he film industry used to be one of the fastest growing industries in the country and in the world as well. 5e used to be recognized in the world in terms of creativity, originality and talent in our movies. 4he industry is moribund,1 said Atienza. !resently, he said only a few local films make a profit as many /ilipinos are more aware of foreign films than the local ones especially because the 6nternet age has allowed the download of the newest foreign movies in people2s computers and let the local movies run dry in the local movie houses. -7uch reality plus the rising cost of movie production have made it harder for startup film companies to enter the industry, and thereby has watered down competition and improvement in the whole film industry. 4he local film industry needs subsidies and a tax break to be able to bounce back and be more competitive once more,1 said Atienza. $e said local writers8 directors and producers are still topnotch as before and can still compete with their counterparts in international markets. 4his is attested by the good reviews and many standing ovations being received now by !hilippine films in international film festivals, such as the .annes /ilm festival according to the legislator. -5e can easily compete with $ollywood-produced films. 5e 9ust need to help the local film industry right now in retracing its path to profitability and greatness,1 said Atienza. $ouse "ill %&'( or the proposed -!hilippine /ilm 6ndustry 4ax $oliday Act of :(*',1 which is now pending at the $ouse committee on ways and means chaired by Rep. Romero -;iro1 <uimbo :nd 0istrict, ;arikina .ity#, provides that the importation of machinery and e=uipment, and accompanying spare parts directly related to the making of films shall be exempt to the extent of *(( percent of the customs duties and national internal revenue taxes payable hereon.

/urthermore, it provides that a domestic manufacturer of any of these articles enumerated therein shall be entitled to a tax credit e=uivalent to *(( percent of the national internal revenue taxes, customs duties and levies actually paid on the raw materials used in the manufacture of the article. 4he purchaser of such article shall also be entitled to a tax credit of *(( percent of the value of the national internal revenue taxes and customs duties imposed thereon under 7ection *(' of the 4ariff and .ustoms .ode of *),&, as amended, and levies provided by law or presidential decree if such article had been imported. 4he bill further provides there shall be a *(( percent tax exemption on the rental of e=uipment, editing fees and marketing fees in relation to the production and needed postproduction events for the promotion of the films. 4he bill refers to a domestic manufacturer as> a citizen of the !hilippines, a partnership or any other association organized under !hilippine laws, with at least +( percent of its capital owned and controlled by citizens of the !hilippines8 and a corporation or cooperative organized under !hilippine laws with at least +( percent of its capital stock outstanding and entitled to vote owned and held by citizens of the !hilippines, and with at least +( percent of the members of its "oard of 0irectors being citizens of the !hilippines. 4he bill assigns the /ilm 0evelopment .ouncil of the !hilippines /0.!# and the 0epartment of /inance 0?/# to formulate the guidelines of the proposed Act. %(# rbb