Last updateSun, 21 Sep 2014 9pm

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Solon seeks tax perks for local film industry

A lawmaker recently filed a bill seeking to grant five-year tax holidays for the local film industry.

House Bill (HB) 3840, filed by Rep. Jose Atienza Jr. of Buhay Party-list, seeks to help the local movie industry to recover and be more competitive, especially with the entry of foreign players.

The measure also seeks to amend Republic Act 9167, known as “An Act Creating the Film Development Council of the Philippines.”

Under the proposed “Philippine Film Industry Tax Holiday Act of 2014,” which is now pending at the House Committee on Ways and Means, the importation of machinery and equipment, and accompanying spare parts directly related to the making of films shall be exempt to the extent of 100 percent of the customs duties and national internal revenue taxes payable hereon.

The bill also provides that a domestic manufacturer of any of these articles enumerated therein shall be entitled to a tax credit equivalent to 100 percent of the national internal revenue taxes, customs duties and levies actually paid on the raw materials used in the manufacture of the article.

The purchaser of such article shall also be entitled to a tax credit of 100 percent of the value of the national internal revenue taxes and customs duties imposed thereon under Section 104 of the Tariff and Customs Code of 1978, as amended, and levies provided by law or presidential decree if such article had been imported, the bill said.

The bill further provides there shall be a 100-percent tax exemption on the rental of equipment, editing fees and marketing fees in relation to the production and needed post-production events for the promotion of the films.

The bill refers to a domestic manufacturer as: a citizen of the Philippines, a partnership or any other association organized under Philippines laws, with at least 60 percent of its capital owned and controlled by citizens of the Philippines; and a corporation or cooperative organized under Philippines laws, with at least 60 percent of its capital stock outstanding and entitled to vote owned and held by citizens of the Philippines, and with at least 60 percent of the members of its board of directors being citizens of the Philippines.

The bill directs the Film Development Council of the Philippines and the Department of Finance to formulate the guidelines of the proposed act.

Atienza said the country’s film industry is now in a moribund state. It used to produce an average of 300 films a year, which dropped to less than 50 films a year.

“The film industry used to be one of the fastest-growing industries in the country and in the world, as well. We used to be recognized in the world in terms of creativity, originality and talent in our movies. The industry is moribund,” Atienza said.

According to him only a few local films make a profit as many Filipinos are more aware of foreign films than the local ones, especially because the Internet age has allowed the downloading of the newest foreign movies.

“Such reality, plus the rising cost of movie production, have made it harder for start-up film companies to enter the industry, and thereby has watered down competition and improvement in the whole film industry. The local film industry needs subsidies and a tax break to be able to bounce back and be more competitive once more,” Atienza said.

He said local writers, directors and producers are still topnotch as before and can still compete with their counterparts in international markets. This is attested by the good reviews and many standing ovations being received now by Philippines films in international film festivals, such as the Cannes Film festival.

“We can easily compete with Hollywood-produced films. We just need to help the local film industry right now in retracing its path to profitability and greatness,” Atienza said.










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