Senate bill exempts local films, musical productions from amusement tax charge


Former actor-turned-lawmaker Senator Robinhood Padilla is moving to exempt local films and musical productions from paying amusement taxes to boost the film and music industries to bounce back from the crippling economic effects of the recent pandemic.

In filing Senate Bill 2048, Padilla is aiming to enlist the majority support of lawmakers from the Senate and the House to frontload passage of the enabling legislation “to help the film and music industries recover.”

As filed, the Padilla bill seeks to exempt Filipino-owned local productions from paying amusement tax, and to grant tax holidays to the two industries.

A veteran of the movie industry before turning lawmaker, Padilla’s SB 2048, to be known as The Film and Live Events Recovery Act, noted that amusement tax laws impede the growth of the entertainment industry and drive up the cost of amusement services.

“Hence, it is imperative to give our film and music industries the necessary boost to thrive and recover from the pandemic and new challenges that cost them major losses, while ensuring that the gains redound to local productions, thereby benefiting our people and economy,” the Senate bill read.

The Padilla bill proposes to exempt from amusement tax all locally produced creative materials which copyright is owned by Filipinos and from local productions with at least 10 percent equity owned by Filipinos.

It also grants the film and music industries a tax holiday of two years. In addition, the bill likewise lowers the cap for amusement tax collection under the Local Government Code to 5 percent from the current 10 percent.

In filing the bill, the lawmaker lamented the taxation on filmmakers and producers as “restrictive and burdensome to the detriment of our labor productivity, cultural exhibition and local development.”

At the same time, Padilla noted that locally produced films in 2022 hit P10 million in gross sales, adding the existing taxes require the films to gross 270 percent of production costs to just break even.

Moreover, the bill exempts from paying amusement taxes locally produced film productions, musical plays, operas, concerts, dramas, recitals, painting and art exhibitions, flower shows, musical programs, and literary and oratorical presentations, provided that the copyright of such locally produced work is owned by Filipino/s and that at least 10 percent of the equity of such local productions is owned by Filipinos as certified by the Department of Trade and Industry or the Securities and Exchange Commission.

In addition, proceeds from the amusement tax shall be allocated for programs, activities and projects in the sectors and industries involving the locally produced work, while the remaining proceeds shall be shared equally by the province and municipality where the amusement places are located.

The bill further provides that “within two years from the effectivity of the measure, the power of local governments to levy an amusement tax is suspended with an extendible period of at least two years subject to the approval of the Department of Finance.”