Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

15" CONGRESS
First Regular Session

HOUSE BILL NO. 3365

Introduced by SALVADOR H. ESCUDERO II

EXPLANATORY NOTE

The importance of media and education in national development is enshrined in the
following provisions of the Constitution:

“The State recognizes the vital role of communication and information
in nation-building.” (Article II, Section 24)

“The State shall protect and promote the right of all citizens to quality
education at all levels and shall take appropriate steps to make such education
accessible to all.” (Article XIV, Section 1)

The process of learning demands an effective avenue for knowledge transfer. The
broadcast and print media are always in constant contact with the population. They play a
potentially active and efficient role in disseminating educational information.

‘The broadcast and print industry is currently market driven. Corporate sponsors prefer
to advertise in shows that have a big audience share.

Cognizant of this reality, and recognizing its importance to the present educational
program, this Bill grants tax incentives to educational programs and publications, together
with their respective advertisers and sponsors. It is hoped that the measures contained in this
Bill with alleviate the economic plight of the media industry as a whole and shall become an
effective tool in the success of the national education program

Admittedly, media is an effective alternate vehicle to deliver educational services to
our population. In this context, every Filipino can be extended educational services beyond
the four comers of the classroom and in the comfort of their homes.

In view of the foregoing consideration, early approval of this Bill is earnestly sought.

Be, W
SALVADOR H. ESCUDERO It

Representative
1® District, Sorsogon


Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

15" CONGRESS
First Regular Session

HOUSE BILLNO. _ 3365

Introduced by SALVADOR H. ESCUDERO III

AN ACT
GRANTING TAX INCENTIVES TO BROADCAST AND PRINT MEDIA
DEVOTING AIR TIME AND SPACE TO EDUCATION, AS WELL AS, TO
SPONSORS SUPORTING SUCH PROGRAMS AND FOR OTHER PURPOSES

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

SECTION 1. Declaration of Policy. — It is hereby declared the Policy of the State to
recognize the vital roles of communication and information in nation building and shall take
appropriate steps to make education accessible to all.

Pursuant to this policy, the State shall promote, support and provide incentives to
broadcast and print media, as well as, to sponsors or advertisers, who provide air time and
print space for educational purposes.

SEC. 2. Coverage. - This Act shall apply to all kinds of mass media operating within
the Republic of the Philippines.

SEC. 3. Definition of Terms. — When used in this Act. —

(a) “Mass Media” - media for brevity, refers to the means of communications which
include both broadcast and print media directed to the public at large;

(b) “Broadcast Media” ~ refers to radio, television, cable broadcast and the like:

(c) “Print Media” — refers to newspapers, magazines, reviews bulletins and other
publications appearing at regular intervals, with fixed prices for subscription and
sale and published within the Philippines;

(d) “Commercials and Advertisements” — shall mean announcement, description,
presentation, advertising or promotion of goods or services, in newspapers,
magazine, television, radio and cable broadcast, etc.;

(e) “Advertisers or Sponsor” — shall mean the owner or the principal of the thing,
product, goods or service to be advertised; and


(f) “Educational Purposes” — includes but not limited to, educational programs,
publications, commercials and advertisement which:

give positive influence or entertainment;

promote social values;

promote the importance of basic education;

improve the image of technical education and skills

training and to inculcate the necessary values needed

for productive employment;

5. propagate culture, foster patriotism and nationalism and

values that serve as an instrument in strengthening

ino sovereignty, identity, national unity and integration;

6. propagate awareness of rights and duties of citizen as enshrined
in the constitution and in other laws of the land;

7. and such other similar descriptions, the Secretary of Education

may provide pursuant to the implementation of this Act.

Pepe

SEC, Tax Exempt Importation. - The provision of existing laws to the contrary
notwithstanding the machinery, equipment, tools for production, spare parts, supplies,
materials and transportation and communication facilities to be used actually, directly and
exclusively for educational purposes by media producers and publishers are not subject to
Duty and Internal Revenue Tax: Provided, That the National Economic and Development
Authority certifies to the availability of the above-mentioned items in the local market of
sufficient quantity, comparable quality, and price to meet the needs of the producers and
Publishers subject to existing taxes, the importation of said items shall be subject to
applicable taxes: Provided, further, That such tax-exempt items brought or imported into the
country are subsequently sold, transferred or exchanged in the Philippines to be devoted to
non-educational purposes, the purchasers or recipients shall be considered the importer
thereof, and shall be liable of the Duty and Internal Revenue Tax due on such importation,
subject to depreciation allowance. The tax due on such items shall constitute a lien on the
article itself, superior to all other charges or liens, irrespective of the possessor there.

SEC. 5. Donations for Educational Purposes. ~ For purposes of this Act, any amount
paid and contributed for educational programs and publications by any individual or
corporation which shall not exceed ten (10) percent of their respective annual income
computed without the benefit of any tax incentive under existing law shall be tax deductible,

Properties other than cash donated shall be valued in accordance with the rules and
regulations prescribed by the Secretary of Finance.

SEC. 6. Program and Publication. ~ The net income derived from educational
programs and publications shall be tax-exempt for five (5) years from the start of its initial
Operation or until the producer and publisher shall have attained reasonable return of their
investment. Thereafter, no part of the net income which inures to the benefit of the producer
publisher in an amount not in excess of twenty-five (25) percent of the taxable income
derived from the program or publication shall be allowed. The excess amount of the net
income shall be devoted for the enhancement of the educational program and for other
educational purposes.



SEC. 7. Commercial and Advertisement. — All expenses incurred in the production of
commercials and advertisements with educational impact, approved by the Secretary of
Education or any equivalent government agency, endorsed by the Kapisanan ng Broadkaster
ng Pilipinas, Publisher's Association of the Philippines, Philippine Press Institute and other
media organization, shall enjoy tax deduction of not more than ten (10) percent of the gross
operating expenses of the advertisers or sponsors: Provided, That these commercials and
advertisements are actual delivered to the general pul

SEC. 8. Airtime Rates and Cost of Space. — Broadcast and Print Media shall give ten
(10) percent lower airtime rates and cost of space for every paid feature of production with
educational content, as approved and certified by the Secretary of Education or any
equivalent government agency and endorsed by broadcast and print recognized organizations,
the difference from the regular rates shall be chargeable to the value added tax accruable.

SEC. 9. Government Cooperation. — Every department, bureau, office, agency or
instrumentality of the government, including government-owned and controlled corporations,
are enjoined to cooperate with the private sector in order to achieve the objectives of this Act.

SEC. 10. Separability Clause. ~ If any provision of this Act shall be declared
unconstitutional , the provisions which are not affected thereby shall continue in force and
effect.

Sec. 11. Repealing Clause. - Any law, act, decree, order proclamation, regulation or
any part hereof is inconsistent with this Act is hereby repealed and modified accordingly.

SEC. 12. Effectivity Clause. ~ This Act shall take effect upon its approval.

Approved.