Film council can keep amusement tax collected before Oct. 2019

FILE: Facade of Supreme Court of the Philippines (PNA photo)

MANILA – The Supreme Court (SC) has clarified its earlier decision disallowing the Film Development Council of the Philippines (FDCP) from collecting and giving film amusement taxes as incentives to makers of certain “graded” movies.

In a resolution dated Nov. 3 penned by Senior Associate Justice Estela Perlas-Bernabe and made available Thursday, the SC en banc clarified that the FDCP is “not required to return to the LGUs (local government units) all remittances already received by it from proprietors, operators or lessees of theaters or cinemas pursuant to its implementation of Sections 13 and 14 of RA (Republic Act) 9167 from the effectivity of RA 9167 up until October 15, 2019” when the court’s ruling on the case became final.

Under the original ruling of the court, Filipino films Graded A and B by the Cinema Evaluation Board (CEB) will no longer be awarded amusement tax privileges by FDCP.

The SC, in its latest resolution, also clarified that “proprietors, operators or lessees of theatres or cinemas are obliged to remit to FDCP all revenue from the amusement tax on the graded film which may otherwise accrue to the cities and municipalities in Metropolitan Manila and highly urbanized and independent component cities in the Philippines pursuant to Section 140 of the LGC during the period the graded film is exhibited, provided that, revenue to be remitted to FDCP arises only from graded films already exhibited during the period of the effectivity of RA 9167 up until October 15, 2019”.

The tribunal last year denied with finality FDCP’s motion for reconsideration and affirmed its June 16, 2015 decision declaring Sections 13 and 14 of RA 9167 which created the FDCP as a “violation of the principle of local fiscal autonomy since it authorized FDCP to earmark, and hence, effectively confiscate the amusement taxes which should have otherwise inured to the benefit of the local government units.”

Section 13 grants amusement tax rewards to producers of Graded A and B films, while Section 14 entitles FDCP to collect the amusement taxes for the graded films from theaters in Metro Manila and highly urbanized and independent component cities.

A Grade A film is rewarded with 100 percent of amusement taxes collected on such film and a Grade B film is awarded 65 percent of amusement taxes collected on such film, with the remaining 35 percent going to the FDCP fund.