Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 3787

‘ Introduced by Rep. TEDDY A. CASINO

EXPLANATORY NOTE

Filipinos are known to be highly artistic and cultural individuals. We pride ourselves in having
world-renowned musicians and singers,

At present, however, it is a dark time for the Filipino music industry. Piracy levels have reached
83%, according to the Philippine Association of the Record Industry (PARI). The International
Intellectual Property Alliance had ranked the county as fifth in global and second in Asian music
piracy. In 2009 alone, we lost around $112.2 million in audio CD sales.

‘This has extremely affected record sales which has continually declined from a record high of P1
billion in sales in 2000 to several hundred million pesos today. To adapt with the changes, the
standards of awarding gold or platinum record have also been changed. The 20,000 quota for a gold
record had been cut in half to make it more attainable.

This has not only affected the economic aspect of the field — with producers and record labels
closing shop, artists not earning enough — but also the creative aspect. Artists are advised to sing old
songs to ensure that the albums would sell instead of making their own or employing composers to
make new original Filipino songs that may or may not sell.

With the record industry flailing, artists rely on live performances to make a living. However, this
has become just as challenging with the threat of foreign competition and high production costs.
Producers and artists are further burdened by multiple taxes, from VAT paid for services and
materials and amusement tax paid to the local government.

In a recent roundtable discussion with the Organisasyon ng Pilipinong Mang-aawit, the Philippine
Association of the Record Industry, various producers, artists and record labels, it was revealed that
the rate of amusement tax differed depending on the city or municipality. No refunds are also made
based on actual ticket sales. Some were asked certain amounts of money based on estimated ticket
sales, regardless of the law’s provision that it be computed from the “gross receipts from admission
fees.”


‘The high and arbitrary amusement taxes being paid by concert artists and producers have prohibited
them from earning enough — with some barely breaking even. This lack of incentive has dissuaded
producers and managers from organizing live performances. At the very least they scrimp on the
production. This may translate to lower employment opportunities in the industry, as well as a
tendency to hold back the artist’s creativity in favor of economic practicalities,

Ics in this light that we seck amusement tax exemption for local artists promoting original Filipino

[his is also a reminder to government officials that they should implement the law properly —
that the ceiling amusement tax rate is 10%, as set by Republic Act No. 9640 which amended Republic
Act No. 7160 or the Local Government Code, and that such will be taken from the gross receipts of
admission fees, refunding whatever was given in advance. There have also been reports that Filipino
theater acts have been deprived of their right to an exemption.

To further empower the music industry, amusement tax derived from concerts of foreign artists will
be earmarked for workshop subsidies badly needed by our local theater groups, as well as trainings
and workshops for artists and composers to encourage the creation of otiginal Filipino music.

In view of the foregoing, immediate approval thereof is highly recommended.

Approved,

ls? AG

Bayan Muna Party-list


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 3787

Introduced by Rep. TEDDY A. CASINO

AN ACT
PROVIDING FOR TAX EXEMPTIONS AND SUBSIDIES FOR THE LOCAL MUSIC
INDUSTRY AND AMENDING FOR THIS PURPOSE CERTAIN SECTIONS OF
‘THE LOCAL GOVERNMENT CODE OF 1991

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

SECTION 1. Short Title. — This Act shall be known as the “Local Music Industry Incentive Act of
2010.”

SECTION 2. Declaration of policy. ~The State, in its belief that culture is a human right and a
manifestation of the freedom of belief and expression, shall promote and protect the Filipino
national culture which includes the local music industry. First and foremost, it shall encourage and

promote the creation of original Filipino music and provide support to make the industry
internationally competitive. It shall ensure that the music industry provides cultural opportunities to
all Filipinos.

‘ection 140 of Republic Act No. 7160, otherwise known as "The Local Government
amended by Republic Act No. 9640, is hereby amended to read as follows:

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 ten percent (10%)
of the gross receipts from the admissions fees

xxx
“(©) The holding of operas, concerts, dramas, recitals, painting and art exhibitions, flower
shows, musical programs, literary and oratorical presentations, INCLUDING pop, rock, or
similar concerts AS LONG AS THEY FEATURE MAINLY FILIPINO ARTISTS AND
FILIPINO COMPOSITIONS shall be exempt from the payment of the tax herein imposed.

Xx


“(@) PROCEEDS FROM AMUSEMENT TAXES FROM CONCERTS AND OTHER
MUSIC-RELATED PRESENTATIONS SHALL BE EARMARKED FOR
SUBSIDIZING WORKSHOPS OF LOCAL THEATER MUSICALS AND/OR
‘TRAINING AND WORKSHOPS FOR LOCAL ARTISTS AND COMPOSERS. The
REMAINING proceeds from the amusement tax shall be shared equally by the province
and the municipality where such amusement places are located.”

SECTION 4. Implementing Rules and Regulations. ~ The National Commission for Culture
and the Arts, different music industry guilds and organizations, as well as producers and other
stakeholders, within sixty (60) days from the effectivity of this Act, shall issue the necessary rules and
regulations for the implementation of this Act.

SECTION 5. Constitutionality. — Should any provision of this Act be declared invalid or
unconstitutional, the validity or constitutionality of the other provisions shall not be affected
thereby.

SECTION 6. Repealing Clause. — All laws, dectees, letters of instructions, resolutions, orders,
ordinances or parts thereof which are inconsistent with the provisions of this Act, are hereby
repealed, amended, or modified accordingly.

SECTION 7. Effectivity. - This Act shall take effect fifteen (15) days after its publication in wo
(2) newspapers of general circulation.

Approved,