The Philippine movie industry, apart from other industries comprising the entire local arts and entertainment industry has started to see the light in the coming years as most of those engaged in the business would soon receive incentive systems that would encourage them to increase their productivity and would therefore lead to sustainable economic growth in the long-run.

First, the local film industry is soon to receive corporate tax breaks which entitle movie exhibitors and other theater owners’ exemptions from paying amusement taxes provided that the movies are locally-produced and that these are comprised of Filipino artists.  The proposed “Local Arts and Entertainment Industry Promotions Act” is geared towards giving exemptions from moviemakers as regards the total costs incurred in a local movie’s entire theatrical run.

Second, there are also amendments being proposed, such as that of Section 140 of Republic Act 7160, which is also called the Local Government Code of 1991, which now gives local films consisting of predominantly Filipino actors the chance to generate more revenues as tax exemptions are now granted. Instead, a company’s net income usually increases as government revenues are to be assumed to be at zero rate (due to exemption).

Third, the bill amends Section 109 of Republic Act 8424, also known as the National Internal Revenue Code. Producers are then faced with an incentive to produce more films since the importation of raw materials and equipments are to be given VAT exemptions provided that the Bureau of Internal Revenue has the sole right to evaluate which raw materials and equipments are to be used. Exemptions are not only confined to film production and projection, but also include that of album production, theatrical plays, and other forms of art.

The analyses are as follows: more than a decade ago, the movie industry remains one of the most highly-taxed in Asia given the corporate income tax, VAT, and amusement taxes – whereas others do not charge their locally-produced films with any tax so as to encourage participation in movie production and distribution. Just like what the President of South Korea did to encourage local national determination, the Philippines can take on an initial “sure” step in providing incentive systems that would boost producer activity and productivity.

Perhaps, the industry can once more experience another Golden Age of Philippine Cinema. Volume of films will surely increase and most likely, the quality of the film will not suffer for an increase in quantity of local films. Companies may then veer away from the “Pito-Pito” Scheme which only allots seven days for shooting and finishing a film – sacrificing quality then over an increase in quantity, If quality is then assured, there could be a lot of domestically-produced films which can promote Philippine culture and which could also represent the country in prestigious award-giving bodies internationally such as the Cannes Film Festival. The proposed bill then not only assures increase in profitability but also indirectly implies an increase in a film’s overall quality. 


John Camu
Josette Quintos
Rige Tuason
Althea Salcedo

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