Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

oS
* parcdUL_0 2 2919
THE

EIGHTEENTH (18) CONGRESS
First Regular Session

HOUSE BILLNO, 1111

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 seeks 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 order for the whole movie industry of
the Philippines to recover and improve, especially with the entry of new players.

JR.
Party-list



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH (18") CONGRESS
First Regular Session

HOUSE BILL NO. 1

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 2016”.

SECTION 2. Section 12 of Republic Act 9167 is hereby amended to read as.
follows:

“Section 12. Grading of Films. - The grading of films by the Cinema
Evaluation Board shall be subject to the following provisions:

(a) Pre-qualification procedures and requirements. — The Council shall
prescribe pre-qualification procedures and requirements for application
for grading: Provided, That only ALL films whose premiere screening
shall be held in the Philippines, and those which have not had any
previous theatrical release, free television broadcast, cable broadcast or
video release in any commercial medium anywhere in the world shall be
qualified for grading by the Board: Provided, further, That the Board
shall evaluate and grade erty ALL feature film that are intended for
theatrical and other forms or exhibition that will charge admission fees
and which are at least eighty (80) minutes in length and that the producer
shall submit his/her film for grading at least seven (7) calendar days
before its scheduled playdate.”


SECTION 3. Section 13 of Republic Act 9167 is hereby amended to read as
follows:

“Section 13. Privileges of Graded Films, - Films which have obtained an
“A” or “B” grading from the Council pursuant to Sections 11 and 12 of this Act
shall be entitled to the following privileges:

a. Amusement tax reward. - A grade “A” or “B” film shall entitle its
producer to an incentive equivalent to the amusement tax imposed and
collected on the graded films by cities and municipalities in Metro Manila
and other highly urbanized and independent component cities in the
Philippines pursuant to Sections 140 AND 151 OF REPUBLIC Act No.
7160 at the following rates:

1. For grade “A” films — 100% of the amusement tax collected on
such films; and

2. For grade “B” films. — 65% of the amusement tax collected on
Such films. The remaining thirty-five (35%) shall accrue to the funds
of the Council.

B. TAX HOLIDAY. ~ The Council may call for a tax holiday during a
downturn in the local 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 duti
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
manufacturer 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.

SECTION 4. As used in this Act, the term domestic manufacturer shall mean a
citizen of the 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 the members
of its Board of Directors being citizens of the Philippines.

SECTION 5. 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 afer its approval.

SECTION 6. Repealing Clause. — All laws, rules, regulations, orders, circulars
and memoranda inconsistent with this Act are hereby repealed of modified
accordingly.

SECTION 7. Effectivity. — This Act shall take effect immediately upon approval.

Approved.