NOV.

12, 2011 DATE

NR # 2585B
REF. NO.

House body approves tax provisions in Philippine Film Industry Development bill
The House Committee on Ways and Means has approved all tax provisions in the proposal to promote and support the development and growth of the Philippine film industry by reorganizing the Philippine Film Development Council (PFDC) into the Philippine Film Commission (PFC). The substitute bill on the proposed Local Film Industry Development Act of 2011 was approved earlier by the House Committee on Government Reorganization and subsequently referred to the Committee on Ways and Means chaired by Rep. Hermilando Mandanas (2nd District, Batangas) for approval of its tax provisions. The bill authored by Reps. Danilo Ramon Fernandez (1st District, Laguna), Rufus Rodriguez (2nd District, Cagayan de Oro City), Maximo Rodriguez (Party-list, Abante Mindanao), Ma. Georgina de Venecia (4th District, Pangasinan), Lani Mercado-Revilla (2nd District, Cavite) and Marcelino Teodoro (1st District, Marikina City) seeks the reorganization of the PFDC created under Republic Act 9167 into the PFC, which shall be an independent agency and whose powers shall include coordination of all programs and policies of government departments and agencies related to the development of the local film industry. In a recent hearing presided by Rep. Reynaldo Umali, a vice chairman of the Committee on Ways and Means, the panel approved Section 15 ( Privileges of Graded Films) of the bill providing that a grade A or B shall entitle the film 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 7160. For A films, it shall be 80 percent of the amusement tax collected on such films. The remaining 20 percent shall accrue to the PFC funds. For grade B films, it shall be 65 percent of the amusement tax collected on such films, and the remaining 35 percent shall accrue to the PFC funds, provided that 30 percent of the film that was graded A or B, with the other 70 percent accruing to the film producer. The committee also approved Section 16 (Amusement Tax Deduction and Remittances) which provides that all revenues from the amusement tax on the graded film which may otherwise accrue to the cities and municipalities in Metro Manila and highly urbanized and independent component cities in the country pursuant to Sections 140 of RA 7160 during the period the graded film exhibited, shall be deducted and withheld by the proprietors, operators or lessees of theaters or cinemas and remitted within 30 days from the termination of the exhibition to the PFC which shall reward the corresponding amusement tax to the producers and all the talents and workers of the graded film within 15 days from receipt thereof. Proprietors, operators or lessees of theaters or cinemas who fail to remit amusement tax proceeds within the prescribed period shall be liable to a surcharge equivalent to five percent of the amount due for each month of delinquency which shall be paid to the PFC according to the bill.

NOV. 12, 2011 DATE

NR # 2585B
REF. NO.

Section 21 on Funding was also approved which provides for the initial funding of the PFC, there shall be created a Philippine Film Commission Fund Account to be deposited in the National Treasury. It shall be included in the annual General Appropriations Act and shall be constituted from the proceeds from a special film commission tax of P1.00 to be levied on all admission tickets of movie houses in the country for a period of 20 years. To augment its operational expenses, the PFC may utilize the remaining 20 percent and 35 percent of the amusement tax collected during the period grade A and B films are exhibited. It may also impose reasonable fees and charges for services rendered provided that the amount actually collected shall be deposited in the National Treasury as a special account in the General Fund and may be used to augment its maintenance and other operational expenses, capital outlays except the purchase of motor vehicles, subject to existing accounting and budgeting rules and regulations. The PFC may also secure funding from the Philippine Amusement and Gaming Corporation in the amount equivalent to two percent of its gross income necessary to subsidize the production of 30 films annually. Lastly, the committee approved Section 22 on Authority to Accept Donations which provides the PFC may accept donations, contributions, grants, bequests or gifts, in cash or in kind, from various sources, domestic or foreign, except from movie producers relevant to its functions. Cash donations shall not be used to fund the personal services requirements of the PFC, and that any donation, contribution, subsidy or financial aid to the PFC shall be exempt from taxes of any kind and constitute allowable deduction in full from the income of the donors, contributors or givers for income tax purposes. Rep. Rufus Rodriguez (2nd District, Cagayan de Oro City) said the approval of these four tax provisions would give the necessary support to help the dying film industry. The proposed Local Film Industry Development Act of 2011 was filed pursuant to the constitutional guarantee on freedom of expression and the principle of giving priority to arts and culture to foster patriotism and nationalism, accelerate social progress, and promote total human liberation and development according to its authors. (30) rbb