Oro to lower amusement tax to 10 percent

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Thursday, November 18, 2010


THE City Government of Cagayan de Oro is set to implement a reduction in the amusement taxes paid by all movie houses and other related establishments from 30 percent to 10 percent starting January next year.

Councilor Dante Pajo, chairperson of an ad hoc committee created to study Republic Act 9640, said the reduction is stipulated under the law, which, he claims, should be fully enforced in Cagayan de Oro.

Republic Act 9640 is an act amending Section 140 (A) of Republic Act 7160, or the Local Government Code of 1001.

Section 140 (A) states that the "local government may levy an amusement tax to be collected from the proprietors, lessees or operators of theaters, cinemas, concert halls, circuses, boxing stadium and other places of amusement at a rate of not more than 10 percent of the gross receipts from admission fees."

"In order to alleviate the hardships of the industry, there must be a commensurate lowering of the tax burden being imposed. And it is high time that the city government would fully implement RA 96401 for business establishments to enjoy. The law has already been implemented in some cities," Pajo said.

Pajo earlier made a study on the implementation of the law to some movie houses in the city and other stadium and opera owners.

He said he had already met with business establishments and discussed with them the planned reduction of taxes though formal declaration won't be held until December 2.

Pajo said the bill has been amended for the state to promote and support the development and growth of the theater and local film industries as a medium for the dissemination of aesthetic, cultural and social values for the better understanding and appreciation of the Filipino identity.

He added that theaters and movie houses are the primary media through which the output or artistic creation of the local film industry is exhibited.

However, Pajo claimed that the viability of the theater industry is now under threat due to continuous operational losses due to low patronage and high taxation regime.

"Both theater owners and local movie producers are greatly prejudiced by cheaper home movie alternatives like TV and cable programs as well as by rampant film piracy which turns out inexpensive and untaxed films in CD or DVD formats. This severely undercuts the cost of movie tickets at present," Pajo said.

Currently, he said, the entire movie industry is suffering from the collection of two business taxes, each imposed by the national government, which is 10 percent collected through the Bureau of Internal Revenue, and the rest collected by local government units, amounting to 30 percent of gross receipts.

Pajo said that because of this, establishments pay a hefty 40 percent tax which he said is unjust, oppressive and confiscatory. (Nicole J. Managbanag)

Published in the Sun.Star Cagayan de Oro newspaper on November 19, 2010.

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