Exempting the Philippine Film and Movie Industry from the Payment of Certain Taxes

SEIN Offer of the ro TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES First Regular Session 26 FEB 23 P3:55 SENATE RECEIVED BY. S.B. No. _ 1893 Introduced by SENATOR IMEE R. MARCOS AN ACT EXEMPTING THE PHILIPPINE FILM AND MOVIE INDUSTRY FROM THE PAYMENT OF CERTAIN TAXES, AMENDING FOR THE PURPOSE CERTAIN PROVISIONS OF THE R.A. NO. 8424 OTHERWISE KNOWN AS THE "NATIONAL INTERNAL REVENUE CODE OF THE PHILIPPINES," AS AMENDED, AND R.A. NO. 10863 OTHERWISE KNOWN AS THE "CUSTOMS MODERNIZATION AND TARIFF ACT", AND FOR OTHER PURPOSES EXPLANATORY NOTE Article II, Section 17 of the 1987 Philippine Constitution provides that, "the State give priority to education, science and technology, arts, culture, and sports to foster patriotism and nationalism, accelerate social progress, and promote total human liberation and development." Film is one of the most powerful cultural and economic tools available to a nation. It serves not only as a medium of artistic expression but also as an instrument for preserving history, showcasing cultural diversity, and shaping national identity. Through cinema, the Philippines tells its stories to the world-stories that reflect our values, traditions, struggles, and aspirations. Filipino films promote cultural diplomacy, enhance the country's global image, and strengthen our creative presence in the international arena. Despite its immense potential, the Philippine film industry continues to face serious structural and financial challenges. Even prior to the COVID-19 pandemic, the industry was grappling with declining cinema attendance, limited production budgets, and increasing competition from foreign films and digital streaming platforms. The pandemic further devastated the sector, resulting in prolonged cinema closures, halted

productions, job losses, and significant revenue declines for production companies, distributors, and creative workers. This bill therefore proposes to exempt from value-added tax and customs duties the importation of film materials, equipment, and related production tools by duly registered local film production companies. By reducing the financial burden on producers, the measure seeks to stimulate film production activity, encourage investment in the creative sector, and generate employment opportunities for Filipino artists, technicians, writers, directors, and production workers. Supporting the film industry is not merely a cultural initiative-it is an economic strategy. A vibrant film sector attracts foreign investment, promotes film tourism, strengthens allied industries such as hospitality and services, and enhances the Philippines' competitiveness in the global creative economy. Countries that have implemented fiscal incentives for film production have experienced increased domestic output and international collaborations, resulting in sustained industry growth. It is high time that the State fully recognize the Philippine film industry as both a cultural pillar and an economic driver. By granting fiscal incentives that ease production costs, the government affirms its constitutional mandate to promote arts and culture while fostering inclusive economic development. In view of the foregoing, the immediate passage of this bill is earnestly sought. Fmee h. Marca AMEE R. MARCOS

Stati Office of the smro1mp TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES FEB 23 P 3:55 First Regular Session SENATE RECEIVED BI: S.B. No. _ 1893 Introduced by SENATOR IMEE R. MARCOS AN ACT EXEMPTING THE PHILIPPINE FILM AND MOVIE INDUSTRY FROM THE PAYMENT OF CERTAIN TAXES, AMENDING FOR THE PURPOSE CERTAIN PROVISIONS OF THE R.A. NO. 8424 OTHERWISE KNOWN AS THE "NATIONAL INTERNAL REVENUE CODE OF THE PHILIPPINES," AS AMENDED, AND R.A. NO. 10863 OTHERWISE KNOWN AS THE "CUSTOMS MODERNIZATION AND TARIFF ACT", AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Exemption from Value-Added Tax. - Section 109 of the National

Internal Revenue Code, as amended, is hereby further amended to read as follows: "Section 109. Exempt Transactions. - (1) Subject to the provisions of Subsection (2) hereof, the following transactions shall be exempt from the value-added tax: (A) xxX (B) xxx (C) xxx (D) xxx (E) xxx (F) xxX (G) xxx (H) xxx (I) xXX (J) xxX

(K) xxx (L) xxx (M) xxX (N) xxx (0)xxx (P) xxx (Q)xxx (R) xxX (S) xxX (T) xxX (U) xxX (V) xxx (W) xxx (X) xXX (Y) xxX (2) xxX (AA) XXX (BB) xxx (CC) IMPORTATION OF FILM MATERIALS AND EQUIPMENT BY PERSONS ENGAGED IN THE BUSINESS OF MAKING LOCAL FILMS AND OTHER CINEMATOGRAPHIC WORKS, FOR USE IN PRODUCING SUCH FILMS AND OTHER RELATED WORK; PROVIDED, THAT THE BUREAU OF INTERNAL REVENUE SHALL ISSUE THE NECESSARY GUIDELINES IDENTIFYING THE FILM MATERIALS AND EQUIPMENT THAT SHALL BE EXEMPT FROM VALUE-ADDED TAX AFTER PRIOR CONSULTATION WITH FILM PRODUCTION COMPANIES AND FILM DEVELOPMENT COUNCIL OF THE PHILIPPINES."

SEC. 2. Exemption from Customs Duties. - Section 800 of Republic Act No.

10863, or the Customs Modernization and Tariff Act, is hereby amended to read as follows: "SEC. 800. Conditionally Tax and/or Duty-Exempt Importation. - The following goods shall be exempt from the payment of import duties upon compliance with the formalities prescribed in the regulations which shall be promulgated by the Commissioner with the approval of the Secretary of Finance: xxx xxx xxx

(a) xxx (b) xxx (c) xxx (d) xxx (e) xxx (f) xxx (g) xxx (h) xxx 0) xxx 0) xxx (k) xxx (1) xxX (m) xxx (n) xxx (o) xxx (p) xxx (q) xxx (r) xxx (s) xxx (t) xxx (u) xxx (v) xxx (w) xxx (x) xxx (y) xxx (z) xxx (aa) xxx (bb) IMPORTATION OF FILM MATERIALS AND EQUIPMENT, AS IDENTIFIED BY THE BUREAU OF INTERNAL REVENUE, BY PERSONS ENGAGED IN THE BUSINESS OF MAKING LOCAL FILMS AND OTHER CINEMATOGRAPHIC WORKS, FOR USE IN PRODUCING SUCH FILMS AND OTHER RELATED WORK."

SEC. 3. Separability Clause. - If any provision of this Act shall be held

unconstitutional or invalid, the other provisions not otherwise affected shall remain in full force and effect.

SEC. 4. Repealing Clause. - All laws, executive orders, issuances, or any part

2 thereof, which are inconsistent herewith, are hereby repealed or amended accordingly.

SEC. 5. Effectivity. - This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in a newspaper of general circulation. Approved,