House bill urges tax break for local movie companies

MANILA, Philippines — After the government allowed the reopening of cinemas in Metro Manila, a lawmaker on Thursday pushed for the passage of the bill that would temporarily suspend the collection of taxes from local movies.

Under House Bill No. 8428 filed in January this year, Pangasinan Rep. Christopher de Venecia, primary author of the bill, wants to amend Republic Act No. 7160, or the Local Government Code of 1991.

The bill was recently approved by the House committee on local government but has yet to reach the plenary.

De Venecia, chair of the House committee on creative industry and performing arts, seeks to suspend the collection of the amusement tax for two years.

“Taxes are a big dent in the earnings and viability of local film production outfits, which have suffered greatly from the pandemic,” he said in a statement.

“Suspension of the tax collection on local movies will help these movie firms get back on their feet so they can recover their costs and earn enough markup to create more movies and hire back their workers, actors, and tech crew,” De Venecia added.

While the bill has yet to be passed into law, he appealed to the Bureau of Internal Revenue and local government units for a 12-month suspension of the tax collection on local movies to “allow the industry to recover first.”

“While both the live events and movie industries employ around 760,000 workers, and generate no less than P100 billion [a year] for the national economy, with local governments taking a piece of that pie, it is important to evaluate the amusement tax in light of COVID-19,” he said during the January filing of the bill.

De Venecia also noted that amusement tax collections in the Philippines accounted for less than 1 percent of an LGU’s revenues for a year.

Consolidated version

Last July, the technical working group of the House committee on local government chaired by De Venecia approved an unnumbered substitute bill consolidating three other proposals to reduce the amusement tax to 5 percent of the gross receipts from admission fees and suspend the power of local governments to levy an amusement tax for two years.

When enacted into law, the proposed Film and Live Events Recovery Act would also provide an extension of the tax suspension for a minimum of two years, subject to the approval of the Department of Finance.

Meanwhile, proceeds from the amusement tax from locally produced shows and events would be allocated for programs, activities, and projects in the cultural and creative sectors, according to the proposed bill.

The proposal hopes to encourage and promote the creation of original Filipino films, music, and live events, as well as offer support to make these industries provide cultural, creative, and livelihood opportunities to all Filipinos working in these fields.

Cinemas are now allowed to reopen in Metro Manila after the Inter-Agency Task Force on the Management of Emerging Infectious Diseases downgraded the National Capital Region to the less restrictive alert level 3 from October 16-31.