Senate bill exempts local films, musical productions from tax

March 31, 2023 PS Jun M. Sarmiento 221 views

TO help the film and music industries in the Philippines recover from the effects of the pandemic, Senator Robinhood 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 (SB) No. 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.

“Hence, it is imperative to give our film and music industries 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,” he said in his bill.

The bill exempts from amusement tax all locally produced creative materials whose 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 5% from the current 10%.

In his bill, Padilla lamented that taxation on filmmakers and producers is “restrictive and burdensome to the detriment of our labor productivity, cultural exhibition, and local development.”

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 presentation-provided that the copyright of such locally produced work is owned by Filipino 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 (DTI) or the Securities and Exchange Commission (SEC).

Proceeds from the amusement tax shall be allocated for programs, activities, and projects in the sectors and industries involving locally produced work. The remaining proceeds shall be shared equally by the province and municipality where the amusement place is located.

Within two years of the effectiveness of the measure, the power of local governments to levy an amusement tax is suspended for an extendible period of at least two years, subject to the approval of the Department of Finance (DOF).