DILG to push for 3-year tax holiday for local films

DILG to push for 3-year tax holiday for local films

THE DEPARTMENT of the Interior and Local Government (DILG) has backed local film producers in their plea to reduce what they say is the excessive tax burden that makes it difficult to produce more movies.

At a meeting with representatives from the local entertainment industry, DILG secretary Benjamin “Benhur” Abalos, Jr. assured that he would speak with various local government units (LGUs) to present a solution — a three-year holiday on the collection of amusement taxes.

This will allow the local film industry to bounce back from losses due to the pandemic and due to the ongoing issue of piracy, he said at a press conference held after the meeting on Jan. 18 at Camp Crame.

Mr. Abalos noted that movie producers must worry about the 10% amusement tax in addition to the 12% value-added tax (VAT) and paying for the multiple permits needed to shoot in various cities.

“I will talk personally with all the mayors of Metro Manila, give them the numbers to start everything right. Later on, through different leagues, we will give them a full presentation,” he said.

According to film producer and lawyer Josabeth V. Alonso, a film that earns P100 million at the box office will generate a net revenue of P35 million to P37 million after all the tax deductions and distribution fees.

She said that only few locally produced films released in 2023 hit P100 million, with most grossing “an average of P2 [million] to P12 million only.” The additional income from an amusement tax holiday would be a big help to producers, cinema operators, and other industry stakeholders, she said.

In 2019, the Supreme Court rejected the Film Development Council of the Philippines’ (FDCP) motion to grant films amusement tax privileges, saying this violated “the principle of local fiscal autonomy,” with the removal of amusement taxes detrimental to LGUs.

“This autonomy is given by law, so we will just have to ask LGUs to waive taxation,” Mr. Abalos said. He revealed that his father, Mandaluyong Mayor Benjamin Abalos, Sr., was receptive to this and has informally agreed to it.

“If more [LGUs] do it, it will be a very good gesture to keep the ball rolling,” he added.

FDCP chair and veteran actor Tirso Cruz III brought up the need for LGUs to streamline the procedure of securing permits for production, which will encourage both local and foreign producers to make films in the Philippines.

“For foreign producers who are interested in shooting films here, there are over 7,000 islands to choose from… We can entice them to go here,” he said.

In addition, Mr. Abalos emphasized that law enforcement agencies like the Philippine National Police (PNP), National Telecommunications Commission (NTC), and National Bureau of Investigation (NBI) must boost their campaign against piracy.

“It greatly hurts the film industry. We need to give them a healthy environment to help them recover,” Mr. Abalos said.

Currently, only the city governments of Las Piñas and Quezon City do not charge amusement taxes, while Pasay reduced its rate to 5%. Other LGUs still collect 10% amusement tax. — Brontë H. Lacsamana