Proposed tax exemptions on local films seen to boost the industry

EXEMPTING local movie producers from amusement and value-added taxes would improve the competitiveness of Filipino cinema, an industry official said.

Filed last month, House Bill No. 10167, or the Philippine Movie Industry Promotions Act, also seeks to provide customs exemption on the importation of materials and equipment needed for local movie production, a move seen to increase the production budget of movies which could improve the quality of locally produced films.

“This groundbreaking initiative… represents a significant stride forward in recognizing cinema not only as a form of entertainment but as a powerful medium that shapes Filipino culture and empowers the creative workforce,” Directors’ Guild of the Philippines President Mark A. Meily told BusinessWorld in an e-mail.

Explaining the need for the bill, Partylist Rep. Marissa P. Magsino said that movie producers need to spend P10 million to P50 million to produce “quality” movies. “Producing a local film is a very risky investment, with producers needing to invest huge capital with little chance of getting a fair return on their investment.”

Mr. Meily said the tax breaks under the bill will help in “alleviating financial burdens and reducing operational costs for producers.”

Film director and writer Jose Javier Reyes said in a meeting with the Metro

Manila Council (MMC) in February that the local film industry is “heavily taxed” as movie producers need to pay “three types of taxes for each film, including 10% amusement taxes, together with other taxes such as value-added tax and income tax.”

“With these tax incentives, local movie producers will be able to increase the movie’s budget and improve the quality of filmmaking in the Philippines,” Ms. Magsino said in the bill’s introductory note. “With the exemption from amusement tax in exhibiting local films in their cinemas and theaters, venue proprietors and operators will be encouraged to exhibit more Filipino movies.”

It would also encourage greater investment in the local film industry, Mr. Meily said. “This crucial measure not only streamlines the importation process but also makes the Philippines an attractive destination for co-productions with other countries.”

The proposed measure also strengthens the local film industry by “nurturing collaborations” between filmmakers.

“The House bill underscores the government’s commitment to fostering an environment conducive to the growth and development of the local film industry,” he added.

In February, the Metro Manila Council passed a resolution suspending the collection of amusement tax from film screenings of local movies for the next three years.

Metro Manila Development Authority Chairman Romando S. Artes said in a statement that local government units will amend their local revenue codes to “waive the amusement tax for Filipino movies exhibited in Metro Manila from Jan. 8 to Dec. 24 of every year for the next three years.”

Local chief executives supported the resolution following a meeting with Mr. Reyes, who told the MMC that the local film industry has “declined significantly” and suffered a dismal performance since the pandemic happened. —