Tax breaks, perks for local music industry

MANILA, Philippines - The House committee on ways and means has approved a proposal to provide tax exemptions and subsidies for the local music industry to make it internationally competitive.

House Bill 4443, also known as the Local Music Industry Incentives Act has been approved by the panel chaired by Batangas Rep. Hermilando Mandanas.

The bill is co-authored by Mandanas and Antique Rep. Paolo Javier, chairman of the sub-committee on local government.

It is a consolidated version of those filed by Taguig City Rep. Sigfrido Tinga and Bayan Muna party-list Rep. Teodoro Casiño.

“(The Philippines) is a country of creative people whose potential is being stifled by the lack of institutional support to what has become a highly competitive environment,” said Tinga.

“It is high time for the state to be proactive and provide all the necessary legislative and financial support to ensure that Filipino culture survives and flourishes,” he added.           

Citing data from the Philippine Association of the Record Industry (PARI), Casiño said piracy level in the country has reached 83 percent.  

The International Intellectual Property Alliance also ranked music piracy in the country, the fifth strongest in the world and the second largest in Asia. 

“In 2009 alone, we lost around $112.2 million audio CD sales. This has extremely affected record sales which has continually declined from a record high of P1 billion in sales in 2000 to several hundred million pesos today,” Casiño said.

He noted that with the record industry declining, artists rely on live performances to make a living. This too, however, has become challenging because of competition from foreign acts and high production costs.

Casiño said producers and artists are further burdened by multiple taxes levied on the industry.

The bill proposes amendments to Section 140 of Republic Act 7160 otherwise known as “The Local Government Code of 1991” as amended by RA 9640.                                                

It provides that the province may levy an amusement tax to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadiums, and other places of amusement at a rate of not more 10 percent of the gross receipts from the admission fees.

It also provides that the holding of operas, concerts, dramas, recitals, painting and art exhibitions, flower shows, musical programs, literary and oratorical presentations including pop, rock, or similar concerts as long as they feature mainly Filipino artists and Filipino compositions be exempted from tax. 

The proceeds from the amusement tax from concerts and other music-related presentation may also be earmarked for subsidizing workshops for local theater musicals or training and workshops for local artists and composers.                   

The remaining proceeds shall be shared equally by the province and the municipality where such amusement places are located.