Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS

aN

i 08 JUL 2013
SPH

First Regular Session

HOUSE BILL NO. __ 1144

Introduced by Representative Alfredo D. Vargas III

EXPLANATORY NOTE

In the recent times, the local arts and entertainment industry in the country has
slowly been declining in terms of viewer statistics and income. Hollywood films
have surpassed its local counterparts in the mainstream movie industry. In fact,
there would only be less than twenty (20) films which are of good quality and
can be showcased internationally.

It is also noteworthy that movies and such art forms are tools in shaping public
opinion. These art forms affect the socio-economic and socio-political spheres of
the society.

In this measure, we are encouraging producers, film makers and entertainment
professionals to venture deeper in the industry which serves as a vitrine of our
centuries-old culture. Alongside its economic and commercial benefits, we also
aim to integrate social relevance and foster creativity in this bill. Through the

enactment of this bill, we can see the industry transform to something that is
supportive of the needs of the people and is leaning on indigenous culture.

As first filed by the Former Representative from Taguig City, the Honorable
Sigfrido R. Tinga, the general aim of the bill is still the same - the promotion of
the said industry with government intervention.

Having said these, the passage of this bill is sincerely pursued.

ALFREDO D. VARGAS III


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

1144

HOUSE BILL NO.

Intoduced by Representative Alfredo D. Vargas III

AN ACT
PROMOTING LOCAL ARTS AND ENTERTAINMENT INDUSTRY BY PROVIDING
THE LOCAL MOVIE AND FILM INDUSTRY CORPORATE TAX BREAKS AND
EXEMPTING VENUE OPERATORS FROM THE PAYMENT OF AMUSEMENT TAX
WHEN SHOWING LOCALLY PRODUCED FILMS AND MUSIC EVENTS FEATURING
FILIPINO ARTISTS

Be it enacted by the Senate and House of Representatives of the Philippines in

Congress assembled:

SECTION 1. Short title = This act shall be referred

to as “Local Arts and Entertainment Industry Promotions Act.”

SECTION 2. Declaration of Policy - _‘It_ is hereby declared
policy of the State to protect the local arts and entertainment industry and raise
its competitiveness in the international marketplace, as well as keep the industry
afloat despite the threat of digital piracy, by providing them the necessary
income tax breaks, and exempting exhibitors from the payment of amusement
tax thus assisting produces, film companies, and local artists in reducing their
costs, improving the quality of their craft, and making their product more

competitive in the global marketplace.


SECTION 3. Tax Exemption - Any local
producer of a film or movie utilizing one hundred per centum (100%) local staff
may claim the total expenses incurred in the execution, production and showing
of the film: Provided, that the claim for exemption shall be allowed as deduction
from the company’s gross income for the same taxable year: Provided further,
that the total amount of the claimed tax exemption shall be included in their
gross income or revenues and shall be subject to proper documentation and to
the provisions on allowable deductions covered by Chapter IX of the National

Internal Revenue Code (NIRC), as amended.

SECTION 4. Section 140 of Republic Act No. 7160, otherwise known as

the Local Government Code of 1991 is hereby amended to read as follows:

“SECTION 140. Amusement Tax - (a) The province
may levy an amusement tax, to be collected from the proprietors,
lessees, or operators of theaters, cinemas, concert halls, circuses
boxing studios and other places SHOWCASING VARIOUS FORMS
OF AMUSEMENT AND ENTERTAINMENT AT A RATE OF NOT
MORE THAN THIRTY PER CENTUM (30%) OF THE GROSS
RECEIPTS FROM ADMISSION FEES, PROVIDED, THAT THIS
IMPOSITION SHALL NOT APPLY TO LOCALLY PRODUCED FILMS
THAT FEATURE A PREDOMINANTLY FILIPINO CAST OF AT LEAST
80 PER CENTUM (80%) THAT HAVE BEEN CLASSIFIED BY THE
MOVIE AND TELEVISION REVIEW AND CLASSIFICATION BOARD
(MTRCB) AS FIT FOR COMMERCIAL VIEWING.

(c) The holding of LOCALLY PRODUCED operas, concerts, dramas,
recitals, painting and art exhibition, flower shows, musical
programs, literary and oratorical presentations _[(except)
INCLUDING pop, rock or similar concerts [)] FEATURING FILIPINO

ARTISTS shall be exempt from the tax herein imposed.”


SECTION 5, Section 109 of Republic Act No. 8424, otherwise known as

the National Internal Revenue Code, as amended by Republic Act No. 9337,
hereby amended to read as follows:

“SECTION 109. Exempt Transactions - _(1) Subject to the
provisions of subsection (2) hereof the following transactions shall

be exempt from the value-added tax:

IMPORTATION OF RAW MATERIALS AND EQUIPMENT BY
PERSONS ENGAGED IN THE BUSINESS OF MAKING FILMS AND
OTHER CINEMATOGRAPHIC WORK, PRODUCING MUSIC ALBUMS,
THEATRICAL PLAYS, RECITALS AND OTHER SIMILAR ARTISTIC
CREATIONS, FOR USE IN PRODUCING SUCH, INCLUDING BUT NOT
LIMITED TO DIGITAL MEDIA, PROVIDED, THAT THE BUREAU OF
INTERNAL REVENUE (BIR) SHALL HAVE THE EXCLUSIVE RIGHT
TO DETERMINE, AFTER PRIOR CONSULTATION WITH MEMBERS
OF THE FILM INDUSTRY, THE RAW MATERIALS AND EQUIPMENT
THAT SHALL BE EXEMPT FROM VALUE ADDED TAX.”

SECTION 6. Implementing Rules and Regulations - ‘The
Chairpersons of the MTRCB and the National Commission for Culture and the
Arts, in consultation with two accredited performing arts organization and one
film producers organization of the Philippines and the BIR, within sixty (60) days
from the effectivity of this Act, issue the necessary rules and regulations

governing this Act.

SECTION 7. Repealing Clause = All laws, decreed,
executive orders, proclamations, rules and regulations, and other issuances, or
parts thereof, which are inconsistent with the provisions of this Act are hereby

repealed and modified accordingly.


SECTION 8. Effectivity - This Act shall
take effect (15) days after publication in the Official Gazette and in one (1)

national newspaper of general circulation.

Approved,