Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

FIFTEENTH CONGRESS
First Regular Session

404

H. B. No.

Introduced by HONORABLE JUAN EDGARDO “SONNY” M. ANGARA

EXPLANATORY NOTE

The Philippine movie industry has been struggling for its very existence in the face of the
rising costs of production, fierce global competition and the burden of excessive taxation.

Indeed, from the Golden Era of the movies during the late 40's and 50's, it has been
observed that the industry went into a steady decline in terms of quality, as well as, quantity
through most of the 70's and 80's.

In the last couple of years, concerned members of the industry, after numerous
consultations and dialogues, decided to take action. To revive and ensure its future, industry
leaders are now seeking Congressional intervention by way of amendatory legislation to reduce
the rates of taxes that are levied and collected by the national and local governments.

At present, the movie industry shoulders about nine (9) different kinds of taxes, duties
and fees, to wit: (1) cultural tax; (2) amusement tax; (3) withholding tax; (4) municipal tax; (5)
value added tax; (6) excise or specific tax on positive prints; (7) customs duties on films; (8)
corporate income tax and (9) the MTRCB screening fee. In view of this heavy burden, many
doubt if the industry can survive in the 21"century.

In response to the movie industry's urgent appeal, we seek the immediate passage of

LAm~

JUAN EDGARDO “SONNY” M. ANGARA
Representative
Lone District, Province of Aurora


FIFTEENTH CONGRESS OF THE +)
REPUBLIC OF THE PHILIPPINES —_)
First Regular Session )

H.B.Nov__404

Introduced by Honorable JUAN EDGARDO “SONNY” M. ANGARA

AN ACT
REVIVING THE PHILIPPINE MOVIE INDUSTRY BY PROVIDING INCENTIVES.
TO THE PROPRIETORS, LESSEES, OPERATORS OF THEATERS
AND CINEMAS

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

SECTION 1. Except for real property tax on land, no local and national taxes as
prescribed under Republic Act No. 8424, also known as the “National Internal Revenue Code of
1997, As Amended” such as income tax, excise tax, value-added tax, and under Republic Act
No. 7160, also known as the “Local Government Code of 1991" such as amusement tax, shall
be imposed on proprietors, lessee, operators of theaters and cinemas in relation to the showing
or exhibition of movies and films produced by the Philippine movie industry.

In lieu of thereof, five percent (5%) of the gross income earned shall be paid as follows:

1. Three percent (3%) to the national government;

2. Two percent (2%) shall be remitted by the business establishments to the treasurer's
office of the municipality or city where the enterprise is located.

SEC. 2. The term “Philippine Movie Industry” shall pertain to a Filipino citizen or juridical
entity engaged in the production of movies or films. In case of juridical entities, Filipino
ownership must be at least sixty percent (60%) to qualify as part of the Philippine movie
industry.

SEC. 3. The Bureau of Internal Revenue shall implement this law and promulgate the
Necessary rules and regulations within sixty (60) days from its effectivity.

SEC. 4. Repealing Clause. All laws, rules and regulations and orders inconsistent with
this Act are hereby repealed.

SEC. 6. Effectivity. This Act shall take effect upon completion of its publication in at