MANILA, Philippines — The Department of the Interior and Local Government (DILG) has appealed to local government units (LGUs) to implement a tax break for the local film industry to help them recover from losses due to the COVID-19 pandemic.
In a press conference on Thursday, DILG chief Benjamin Abalos Jr. said he plans to talk to local chief executives about possibly implementing the amusement tax holiday.
“Meron na silang VAT, meron pa silang amusement taxes. VAT is 12 percent, Tax is 10 percent at kung nag shooting sila, kaliwa’t-kanan na permits ang kailangan nila. In short, siguro roughly kung sa 100 percent, pinakamalaki na siguro ang 30 percent kung kikita sila, more or less, approximate po ito. Not to mention the fact na marami pang problema,” Abalos said.
(They have VAT and amusement taxes. VAT is 12 percent, while tax is 10 percent. They also need permits when shooting in various locations. So roughly, they just earn around 30 percent, and they still have to address other issues and problems
Abalos also pointed out other problems the industry faces, including piracy and processing of permits, among others.
“Kaya dapat lang tulungan natin sila. Sa ngalan ng DILG, sa amin, tutulong kami na makumbinsi ang mga alkalde at LGU […] baka pupwedeng i-zero na natin. Tulong na natin for the next three years, para makabangon naman sila,” he said.
(That’s why we need to help them. DILG will help convince local chief executives to make the amusement tax zero. To help them in the next three years.)
Meanwhile, film producer and lawyer Joji Malonso explained that implementing a tax holiday would benefit producers and cinema operators since the number of movie viewers remained small.
“From a hundred million, you first deduct the amusement tax, so that leaves you with 90 million, and then you divide that between the cinema operators and the producers, so you’re left with 45 million; from the 45 million, you pay a booking fee to the distributor ranging from 5 to probably 20 percent, and then from that net amount deduct payment for the value-added tax of 12 percent again,” Malonso explained.
“The producer gets approximately 35-37 million net for every hundred million. If you produced a film that costs 50 million, automatically you lose anywhere from 15-17 M. So the impact of the 10 percent, which would be declared as a tax holiday, hopefully, will be very beneficial to the producers because that gives you an added 5 percent because the cinema operators will also benefit from the remaining 5 percent,” she added.