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Nineteenth Congress
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Introduced  by :
HON. MARISSA "DEL MAR" MAGSIN0
0FW PARTY LIST
EXPLANATO RY NOTE
The Philippine movie industry has been in the survival mode in the face of rising
costs of production, heavy taxation burden, piracy, the proliferation of accessible digital
platforms, and fierce global competition.
In  2002,  Republic  Act  No.  9167  was  passed  creating  the  Film  Development
Council of the Philippines (FDCP) which is tasked to encourage and undertake activities
that will promote the growth and development of the local film industry. It laid down a
strategic planning framework with the objective of making the country a global movie
production hub with the following elements:  1) film-related policies and enabling laws;
2)  financial  incentives;  3)  infrastructure,  including  equipment,  special  facilities  and
production services; 4) investments and financing; and 5) skilled workers.
Producing  a  local  film  is  a  very  risky  investment  with  producers  needing to
invest huge capital with little chance of getting a fair return on their investment. The
production cost can vary significantly based on factors such as the scale of production,
the genre, and the specific requirements of the film.  Based on statements of the movie
industry stakeholders, the cost of doing a quality film now ranges from Plo Million to
P50 Million'
On the other,  a  long-time movie producer stated that in  2023,  other than  the
proceeds of the recent Metro Manila Film Festival (MMFF), most local movies shown in
2023 had ticket sales of only about P 12 million. From the earnings of the film,10% goes
to the local government unit (LGU) for the amusement tax, 45% goes to the cinema or
venue owner, and the remaining 45% to the producer, who shoulders the 12% value-
added tax (VAT) and the 5% distributor's fee, Given the situation, local film producers


are asking for more support from the government as they try to revive the Philippine
movie industry. 1
This bill seeks to provide incentives to the Philippine movie industry to promote
its financial viability by reducing the cost of film production through exemption from
value-added  tax  (VAT)  and  custom  duties  for  the  importation  of film  materials  and
equipment by movie producers and persons engaged in the making of local films and
other  cinematographic  works.  Likewise,  the  proposed  measure  aims  to  exempt  the
exhibition of locally produced films by proprietors, lessees and operators of cinemas,
theatres and other places of amusement from amusement tax.
With  these  tax  incentives,  local  movie  producers  will  be  able  to  increase  the
movie's budget,  improve  the  quality of film making in the  Philippines,  and boost the
industry's  competitiveness  in  the  international  arena.  And  with  the  exemption  from
amusement tax in exhibiting local films in their cinemas and theatres, venue proprietors
and  operators  will  be  encouraged  to  exhibit  more  Filipino  movies  in  proportion  to
foreign-produced  films,  which  redounds  to  greater  ticket  sales  for  the  local  movie
producers.
With a revitalized  Philippine movie  industry comes the  benefits for the
welfare  and  well-being  of  thousands  of  workers  employed  and  would  be
employed in the industry, together with their families.
The  challenge  for  filmmakers  is  to  make  films  that  are  worth  watching  in
cinemas in terms of values, information, and visual entertainment offered by their films.
As a complement, cinema operators must strive to offer and maintain excellent facilities
and  technical  standards  in  the  exhibition  of locally  produced  films  for a  wholesome
cinematic experience.
For the foregoing reasons, the immediate passage of this bill is earnestly urged.
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RISSA "DEL
1 Sourced from: https://www.rappler.com/business/analysis-new-golden-age-philippine-cinema/


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Nineteenth Congress
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Introduced  by :
HON. MARISSA "DEL MAR" MAGSIN0
0FW PARTY LIST
ANACT
PROMOTING THE PHILIPPINE MOVIE INDUSTRY BY PROVIDING TAX INCENTIVES
TO LOCAL MOVIE PRODUCERS AND CINEMA PROPRIETORS, LESSEES AND SIMILAR
VENUE OPERATORS IN THE PRODUCTION AND EXHIBITION OF FILIPINO FILMS
Be  it  enacted  by  the  Senate  House  of  Representatives  of the  Philippines  in  Congress
assembled:
Section  1.   Short  TI.tJe - This Act shall be  known as the  `Philippine  Movie  Industry
Promotions Act'.
Section 2.   DecJaratl.on a/Poll.ey -It shall be the policy of the State to promote and
support   the   development   and   growth   of  the   Philippine   movie   industry   as   an
indispensable  economic  partner  in  nation-building,  and  as  a  cultural  medium  for  a
better understanding of Filipino values and national identity by local and international
audiences.
Towards  this  end,  the  State  shall  provide  incentives  to  the  Philippine  movie
industry to advance and stimulate its financial viability amidst the negative  effects of
digitalization and digital piracy, to reduce their cost of production, improve the quality
of film  making in  the  Philippines,  and  boost its  competitiveness  in  the  international
arena. The incentives shall be in the form of exemption from value-added tax (VAT) and
custom duties for the importation of film materials and equipment by persons engaged
in  the  making  of  local  films  and  other  cinematographic  works,  and  exemption  of
exhibition of locally produced films by proprietors, lessees and operators of cinemas,
theatres and other places of amusement from amusement tax,


Section 3. Exemptl.on /ron Vafue-Added Tor - Section 109 of Republic Act No, 8424,
otherwise known as the National Internal Revenue Code, as amended, is hereby further
amended to read as follows:
'Secti`o#  £09, Exempt rransflcti'o7]s, -(1)  Subject to the  provisions  of Subsection
(2) hereof, the following transactions shall be exempt from the value-added tax:
(A)       xxxxx
XXXXX
(88)       xxxxx
(CC)       IMPORTATION  OF  FILM  MATERIALS AND  EQUIPMENT BY PERSONS
ENGAGED  IN  THE  BUSINESS  OF  MAKING  LOCAL  FILMS AND  OTHER
CINEMATOGRAPHIC  WORKS,  FOR  USE  IN  PRODUCING  SUCH  FILMS
AND  OTHER  RELATED  WORK;  PROHJDED,  THAT  THE  BUREAU  OF
INTERNAL   REVENUE   SHALL   ISSUE   THE   NECESSARY   GUIDELINES
IDENTIFYING THE FILM MATERIALS AND EQUIPMENT THAT SHALL 8
EXEMPT  FROM  VALUE-ADDED  TAX  AFTER  PRIOR  CONSULTATION
WITH    FILM    PRODUCTION    COMPANIES    AND    WITH    THE    FILM
DEVELOPMENT COUNCIL OF THE PHILIPPINES.'
Section 4. E*emptl.on flrom custom Dutr.es -Section 800 of Republic Act No.  10863,
otherwise known as Customs Modernization and Tariff Act, is hereby amended to read
as follows:
`Section 800. Conditionally Tax and/or Duty-Exempt Importation. - The fohowing
goods shall be exempt from the payment of import duties upon compliance with
the formalities prescribed in the regulations which shall be promulgated by the
Commissioner  with  the  approval  of  the  Secretary  of  Finance:  xxxx  xxx   xxx
Provl.bed, further,  That  the  President  may,  upon  the  recommendation  of the
Secretary of Finance, suspend, disallow or completely withdraw, in whole or in
part, any conditionally free importation under this section:
(a)        xxxx
XXXX
(aa)      xxxx
(88)   IMPORTATION 0F FILM MATERIALS AND EQUIPMENT, AS IDENTIFIED
BY THE BUREAU OF INTERNAL REVENUE,  BY PERSONS ENGAGED IN
THE      BuslNEss     oF     MAKING     LocaL     FILMs     AND     OTHER
CINEMATOGRAPHIC WORKS,  FOR USE  IN  MAKING SUCH  FILMS AND
OTHER RELATED WORK.'


Section 4. ExeJxpti'on /ron Amusement ron - 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 stadia, and other places of amusement at a rate of not more
than  thirty  percent  (30%)  of the  gross  receipts  from  admission  fees[]:
PR0yJDED,   THAT   THIS   IMPOSITION   SHALL   NOT   APPLY   TO   THE
EXHIBITION,  HOLDING  OR  SHOWING  0F  LOCALLY PRODUCED  FILMS
IN THESE PLACES 0F AMUSEMENT;
(b)     xxxx
XXXX
Section 5. Implementing Rules and Regulatibns - Within ninety (90) days from the
effectivity of this Act,   the  Bureau of Internal  Revenue  (BIR),  the  Bureau  of Customs
(BOG),  the  Department  of  the  Interior  and  Local  Government  (DILG)  and  the  Film
Development Council  of the  Philippines  (FDCP),  in  consultation with  organizations  of
film producers, cinema and amusement venue operators in the Philippines, and other
concerned  government  agencies  and  stakeholders,  shall  promulgate  the  rules  and
regulations necessary for the effective implementation of this Act.
Section 6.  Sepambl-JI.ty CrdHse   - If for any reason, any part or provision of this Act
shall be declared or held to be unconstitutional or invalid, the other parts or provisions
hereof which are not affected thereby shall continue to be in full force and effect,
Section  7.     RepcaJing  CJawse  -       All  republic  acts,  executive  orders,  rules  and
regulations,  and  other  issuances,  or  parts  thereof,  that  are  inconsistent  with  the
provisions of this Act are hereby repealed or modified accordingly.
Section  8.   Ejrgctivl.ty CTaurse -   This Act shall take  effect fifteen  (15)  days  after its
publication in the Official Gazette or in at least two (2) national newspapers of general
circulation.
Approved.