Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session

8362

House Bill No.

Introduced by Representative John Marvin “Yul Servo” C. Nieto

EXPLANATORY NOTE:

As a manifestation of support to this timely piece of legislation, this
representation respectfully refiles this bill, which has constantly been
receiving support from the past (Rep. Tinga’s HB 3200) and present (Rep.
Vargas’ HB 1571) Congress.

It is alarming that foreign films have surpassed its local counterparts; there
has been a decline in terms of viewer statistics and income in local films.
Movies and other art forms are recognized as vital tools in shaping public
opinion that is why there is a need to encourage local producers, film
makers, and artists to further create locally produced art for it showcases
our capability of producing quality work and, at the same time, assert our
own national identity.

The Philippines is a country comprised of many talented and creative people
that have proven themselves to the world. It is about time that the State
expresses its support to its people by not hindering their potential with the
lack of institutional support. The country must strive to foster a competitive
avenue that will further encourage local producers to keep on creating.


This measure seeks to make the local arts and entertainment industry more
competitive with the necessary tax breaks provisions. It also seeks to give
corporate tax breaks and certain importation privileges to the local film and
entertainment industry, and to exempt venue operators showing local film as
well as art and music events that feature local artist, from the payment of
amusement tax.

In view of the foregoing, the passage of this measure is earnestly sought.

John in “Yl Servo” C. Nieto


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session

8362
House Bill No.

Introduced by Representative John Marvin “Yul Servo” C. Nieto

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."

Sec. 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.

Sec 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.

Sec. 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 THIRTYPER 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 MOVIDE AND TELEVISION
REVIEW AND CLASSIFICATION BOARD (MTRCB) AS FIT FOR
COMMERCIAL VIEWING.

XXX

(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."

Sec. 5. Section 109 of Republic Act No. 8424, otherwise known as the
National Internal Revenue Code, as amended by Republic Act No. 9337, is
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
CINMEATOGRAPHIC WORK, PRODUCING MUSIC ALBUMS, THEATRICAL
PLAYS, RECITALS AND OTHER SIMILAR ARTISTIC CREATIONS, FOR
USE IN PRODUCING SUCH, INCLUDING BUT NOT LIMITED TO DIGITAL
MEDIA, PROVDED, 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."

Sec. 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.

Sec. 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.

Sec. 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,