Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

EIGTHEENTH CONGRESS
First Regular Session

House Bit no, #044

NTATIVE ALFRED VARGAS

EXPLANATORY NOTE

In the recent times, the local arts and entertainment industry in the country has
slowly been declining in terms of viewer statistics and income, Hollywood films have
surpassed its local counterparts in the mainstream movie industry. In fact, there would
only be less than twenty (20) films which are of good quality and can be showcased
internationally.

Itis also noteworthy that movies and such art forms are tools in shaping public
opinion. These art forms affect the socio-economic and socio-political spheres of the
society.

In this measure, we are encouraging producers, film makers and entertainment
professionals to venture deeper in the industry which serves asa vitrine of our centuries-
old culture, Alongside its economic and commercial benefits, we also aim to integrate
social relevance and foster creativity in this bill. Through the enactment of this bill, we
can see the industry transform to something that is supportive of the needs of the people
and is leaning on indigenous culture.

As first filed by the Former Representative from Taguig City, the Honorable
Sigfrido R. Tinga, the general aim of the bill is still the same - the promotion of the said
industry with government intervention

Having said these, the passage of this bill is sincerely pursued

REA. ALFRED VARGAS
Fifth District, Quézon City


Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Quezon City, Philippines

EIGTHEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 2044

INTRODUCED BY REPRESENTATIVE ALFRED VAR AS
AN ACT
PROMOTING LOCAL ARTS AND ENTERTAINMENT INDUSTRY BY PROVIDING
EHEpHOCAL MOVIE AND FILM INDUSTRY CORPORATE TAX BREAKS AND
EXEMPTING VENUE OPERATORS FROM THE PAYMENT OF AMUSEMENT TAX
WHEN SHOWING LOCALLY PRODUCED FILMS AND MUSIC EVEN'a
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."

SECTION 2. Declaration of Policy - itis 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 for 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.

SECTION 3. Tax Exemption - Any local Producer ofa 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
tacmption 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,

SECTION 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 f om the Proprietors, lessees, or
operators of theaters, cinemas, concert halls, circuses boxing studios
and other places SHOWCASING VARIOUS FORMS OF AMUSEMENT
ANO ENTERTAINMENT AT A RATE OF NOT MORE THAN THIRTY


PER CENTUM (30%) OF THE GROSS RECEIPTS FROM ADMISSION
FEES, PROVIDED, THAT THIS IMPOSITION SHALL NOT. APPLY TO.
LOCALLY PRODUCED FILMS THAT FEATURE A PREDOMINANTLY

BEEN CLASSIFIED BY THE MOVIE 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 FILIPIWe
ARTISTS shall be exempt from the tax herein imposed."

SECTION 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
CINEMATOGRAPHIC WORK, PRODUCING MUSIC ALBUMS,
THEATRICAL PLAYS, RECITALS AND OTHER SIMILAR ARTISTIC
CREATIONS, FOR USE IN PRODUCING SUCH, INCLUDING BUT NOT
LIMITED TO DIGITAL MEDIA, PROVIDED, THAT THE BUREAU OF
INTERNAL REVENUE (BIR) SHALL HAVE THE EXCLUSIVE RIGHT TO
DETERMINE, AFTER PRIOR CONSULTATION W)TH MEMBERS OF
THE FILM INDUSTRY, THE RAW MATERIALS AND EQUIPMENT
THAT SHALL BE EXEMPT FROM VALUE ADDED TAX."

SECTION 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
cheeguation 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.

SECTION 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.

SECTION 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,