The long battle for tax incentives

Click here to read Part I

(Second of two parts)

In summer of 1999, Bibeth Orteza called up to inform me that I had been appointed as a member of the Film Ratings Board. It was a presidential appointment and my main function would be to watch local films, evaluate and help determine along with the other board members those that were worthy of tax rebates.

Before accepting the position, however, I first asked Bibeth where the screenings would be held. When she said Louis Cinema THX, I said, forget it. Watching films one after the other was never a problem with me. There was a time when I was still with the Film Academy Classification Board when we screened about seven films non-stop – without even pausing for lunch or dinner. (Meals were served while we were watching the films.) But to go to Makati on a regular basis was going to be hell for me. Bibeth told me not to give a definite answer yet and asked me to think about it.

The next time she called, I already had my answer. It was a no. I didn’t think I was prepared to make all those trips to Makati. At that point, Bibeth paused for a while and took a deep breath before knocking some sense into my head. "Just because you don’t want to drive all the way to Makati, you are going to give away your slot, which may go to somebody who probably doesn’t even care at all about the movie industry," she said almost in exasperation at the other end of the line. Well, I’ve always listened to Bibeth, so I said yes and accepted the position.

When the new FRB board finally buckled down to work, I wanted to kick myself in the head for accepting the appointment. Travel time to Makati was about two hours and a half from where I live in Quezon City. To be able to make that trip and still be in one piece by the time I got to Louis Cinema, I decided to get a regular driver. But I would still be a wreck – no thanks to the traffic – when I got to the screenings. And the food? Well, FRB chair Zeneida Amador loved to call it Rated C.

In time, I enjoyed doing the task. For one thing, I decided to get a halfway house in Greenhills to cut my travel time down to just about an hour or even less on lucky, traffic-less days.

I also began looking forward to seeing the other FRB members, particularly the vice chair, Digna Santiago, who is a very nice lady. Then, there’s Mrs. Bernadette Paterno who is very motherly and Caridad Sanchez who can give sound advice on about anything in this life.

But most important of all, I began to realize the importance of our duties as FRB members. No, the compensation wasn’t much. It was actually a pittance. But it felt good helping the movie industry by giving tax rebates to well-crafted films.

Under the FRB rules, a film rated A gets 100 percent tax rebate, while a B-rated film gets 65 percent. This is really quite a big tax relief to producers who are saddled with the amusement taxes imposed by the government.

You see, if we pay P80 per movie ticket (this is for balcony), P12 automatically goes to the city treasurer. The remaining P68 will be divided between the producer and the theater owner. The producer therefore only gets P34 out of the P80 we as movie patrons pay at the box office.

If a film is rated A, the P12 that should go to the city treasurer is given back to the producer. In the FRB history, however, films that were rated B were the ones that really benefited from these tax rebates because these were the ones that became blockbuster hits. An example is Vilma Santos’ Anak, which was rated B, but really hit it big at the box office and got a 65 percent tax rebate. Out of those rebates, a producer can bankroll another film project. The creation of the Film Ratings Board therefore was a blessing to this tax-saddled industry.

Unfortunately, it is not mandatory for cities and municipalities to give tax rebates. During the old FRB – yes. But that was only because Imelda Marcos (who, in fairness, showed some concern for the industry) was still in Malacañang and was governor of Metro Manila and the mayors did as they were told by the former First Lady.

Starting in the 1990s, however, Marichu Maceda had to go from city hall to city hall to beg (and I really mean beg) so that the mayors and the city council would agree to give tax rebates to films rated by the FRB. But not all the cities and municipalities were convinced, sad to say.

Late last year, only Quezon City and the Rizal towns of Antipolo, Cainta and Taytay were giving rebates to FRB-rated films. At that point, I realized that our existence was already useless since films that would get an A or B from the FRB wouldn’t be getting much in terms of rebates. Even the FRB decided to stop operations early this year.

But the good news now is that – finally – the system of giving tax rebates to well-made films will soon be made into a law. And this only means that all cities and municipalities in Metro Manila and other key cities in the country would be compelled to give tax rebates to FRB-rated films.

This is actually the culmination of a long battle. In 1996, for instance, industry leaders once more tried to give it a shot by asking the government to turn the handing out of rebates into a law. Marichu tried to work it out in Congress with the help of Reps. Mike Romero, Ralph Recto and Gerry Espina. Armida Siguion Reyna, on the other hand, worked on the Senate with then Senators Juan Ponce Enrile and Gloria Macapagal Arroyo filing the bill.

As you may have read in the papers, the Film Development Council of the Philippines will soon be formed and under this would fall a new body to take the place of the old FRB. It will be called the Cinema Evaluation Board and it should have more teeth than the old ratings board.

Of course, there are still other problems in the industry waiting for solutions – censorship, piracy and yes, the other forms of taxes imposed by the government on the film business.

But the fact that the government has finally agreed and has even turned into law the handing out of tax rebates to quality films is already a major victory – the result of a long, long battle fought by industry people whose love and care for Filipino films is undying.