Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH (16") CONGRESS
First Regular Session

bs 3840
House Bill No.

Introduced by: Representative Jose L. Atienza, Jr.

EXPLANATORY NOTE

Our film industry used to be one of the fastest growing industries
in the Philippines and in the world as well. We used to be recognized in
the world in terms of creativity, originality, and talent in our movies.
From an average of 300 films a year, we have dropped to making less
than 50 films a year. Our film industry is moribund. At present, only a
few films make a profit in the Philippine movie industry. Many Filipinos
are more aware of foreign films than the local ones especially now in the
internet age where people can just download the newest foreign films in
their computers and let the local movies run dry in the local movie

houses.

‘These realities 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 industry needs subsidies and a tax break to be able to bounce back

and be competitive once more.


Our writers, directors, and producers are still as topnotch as before,
and can still compete with their counterparts in international markets.
And because of the good reviews and many standing ovations received
now by Philippine 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 Philippine film industry right now in
retracing its path to profitability and to greatness.

This Act secks to provide a five (5) year tax holiday for the film
industry — including the purchase of equipment, production of films, and
exhibition of said films starting on the year of its approval, in eldeatar
the whole movie industry of the Philippines to recover and improve,

especially with the entry of new players.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH (16) CONGRESS
First Regular Session

’ 840
House Bill No.

Introduced by: Representative Jose L. Atienza, Jr.

AN ACT
PROVIDING A FIVE (5) YEAR TAX HOLIDAY FOR THE FILM
INDUSTRY BY AMENDING REPUBLIC ACT NO. 9167,
OTHERWISE KNOWN AS “AN ACT CREATING THE FILM
DEVELOPMENT COUNCIL OF THE PHILIPPINES, DEFINING
ITS POWERS AND FUNCTIONS, APPROPRIATING FUNDS
THEREFOR, AND FOR OTHER PURPOSES”

Be it enacted by the Senate and the House of Representatives in Congress
assembled:

SECTION 1. Short Title. - This Act shall be known as the “Philippine
Film Industry Tax Holiday Act of 2014.”

SEC. 2. It is hereby declared that a Tax Holiday be called for the local
movie industry. The tax holiday will follow these guidelines:
(a) Tax and Duty Exemption on Capital Equipment. — importation
of machinery and equipment and accompanying spare parts
directly related to the making of films shall be exempt to the extent
of one hundred percent (100%) of the customs duties and national
internal revenue tax payable thereon.

(b) A domestic manufacturer of any of the articles enumerated


therein shall be entitled to a tax credit equivalent to one hundred
percent (100%) 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
likewise be entitled to a tax credit of one hundred percent (100%)
of the value of the National Internal Revenue taxes, 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 had such article been imported.

(c) Tax Exemption on rental of equipment and on post-production
expenses such as editing and marketing of films. There shall be a
one hundred percent (100%) 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.

SEC. 3. As used in this Act, the term domestic manufacturer shall mean a
citizen of the Philippines, a partnership or any other association organized
under Philippine laws, with at least sixty percent (60%) of its capital
owned and controlled by citizens of the Philippines; a corporation or
cooperative organized under Philippine laws with at least sixty percent
(60%) of its capital stock outstanding and entitled to vote owned and held
by citizens of the Philippines, and with at least sixty percent (60%) of the

members of its Board of Directors being citizens of the Philippines.

SEC. 4. The Film Development Council of the Philippines (FDCP) and
the Department of Finance shall formulate and publish guidelines for the
implementation of this Act in the Official Gazette and in any newspaper
of general circulation within ninety (90) days after its approval.


SEC. 5. Repealing Clause. — All laws, rules, regulations, orders, circulars
and memoranda inconsistent with this Act are hereby repealed of

modified accordingly.

SEC. 6. Effectivity. — This Act shall take effect immediately upon

approval.

Approved.