QC scraps amusement tax on local films

Quezon City Mayor Feliciano Belmonte Jr. signed yesterday an ordinance that exempts from amusement taxes all locally produced films shown at city-based theaters.

"The city government wants to help promote Filipino culture and values," Belmonte told members of the local film industry who witnessed the signing ceremony held at Albert Hall of Quezon City Hall.

Whatever amount the city government would lose in term of taxes can be recovered by the future benefits the film industry can contribute to nation building.

Present during the signing of the landmark ordinance were Vice Mayor Herbert Bautista, council majority leader Antonio Inton and other members of the City Council, Film Academy of the Philippines (FAP) chairman Espiridion Laxa and movie director Leo Martinez.

The newly approved ordinance reduces the amusement taxes from 15 percent to 0 percent on films produced locally.

Belmonte said that with this pioneering piece of legislation, it is hoped that similar ordinances, or those that tend to support and give incentives to a "dying" cultural medium, will be enacted in other local government units as well.

Bautista, a former actor, said the decline in the number of locally produced films may be attributed to heavy taxation by both the national and local government.

Quezon City is the country’s first local government unit to implement the reduction of amusement tax on locally produced films from 50 percent to 30 percent by virtue of an ordinance passed five years ago.

Earlier, the FAP urged Belmonte to explore the possibility of giving additional assistance to local film producers and distributors by reducing further the amusement tax imposed by the city government.

Excessive taxation and film piracy are two major factors cited by Laxa and Martinez that contributed to the sharp decline in the number of films produced in the country.

According to the FAP, the Philippine film industry has experienced a substantial decrease in the number of locally-produced motion pictures from over 200 films in the 1970s and 1980s to an average of only 82 films from 2000 to 2003, and to a mere 56 films in 2004.

"There is a need to extend some incentives to the local film industry in order to encourage more local film productions, and breathe life to a financially-challenged industry," Inton said.

The imposition of taxes for places and activities of amusement is provided for under Section 39 of the Quezon City Revenue Code, which states that a tax with the corresponding rate of percentage of the gross receipts from admission fees shall be collected from the proprietors and operators.

The Quezon City government collects a 30 percent amusement tax from the showing of foreign films at its theaters.