NEWSFLASH

FILM INDUSTRY GETS TAX BREAKS

Manila, May 20, 2000 - The Department of Trade and Industry will grant tax breaks to filmmakers by including them under the Investment Priorities Plan.

Board of Investments (BOI) executive director Elmer Hernandez said the tax breaks under the IPP will enable them to export their products.

Hernandez said film industry officials have long clamored for government intervention such as rationalization of tariffs and taxes since the industry is one of the most heavily taxed industries. About 50 percent of their gross earnings go to taxes, forcing some producers to make more cheap, commercial films to recoup their investments.

By entitling the industry to incentives, film producers will save on costs and encourage them to produce better quality films for export.

Despite its huge contribution to the economy in the form of taxes and employment generation, the film industry remains regarded as an entertainment tool.

In the past, the film industry had appealed to Congress for a reduction in taxes but failed.

Hernandez said the DTI and the film associations also agreed to set up a film competitiveness body that will contain the blueprint or masterplan for the industry. To be composed of directors, producers, technical support staff as well as members of government agencies, the body will be formed shortly through the issuance of an executive order.

In terms of output, the Philippines is ranked third in the world next only to the United States and India but it closely rivals Hong Kong.

Local filmmakers produce 150 to 200 movies a year.