LIVE PERFORMANCE AT THE BRINK OF DEATH:
A Position Paper on the Amusement Tax

LIVE performance is a premium art form. It is also an industry, no matter how small a part of the country's economy. It provides income to people, feeds a number of families… and yes, an active participant of the business sector being a user and supplier of goods and services.

Live performance include theater, ballet, recitals, painting exhibition, literary and oratorical presentations and concerts. Live performance production entails costs not only in paying artists' talent fees but a host of other costs including manpower and materials required to set up the venue and services during and after every performance and marketing of the show. It earns from ticket sales.

Live performance is a flourishing industry in the late 1980s. A variety of shows can be found around Metro Manila. Restaurants, hotel bars, discos and joints, in addition to established theater and concert halls, were regular venues of these performances. Then, tourists and families had a wide array of shows to choose from. Most of these live performances are pop concerts which found remarkable acceptance among the young generation, especially the young professionals.

The enactment of RA 7160- the Local Government Code and RA - the Comprehensive Tax Reform Law were never given attention in the industry, until it started to inflict pain and started to threaten the industry to extinction. The implementation of these laws particularly, the imposition of amusement tax discouraged production outfits from pursuing concert projects after experiences of paying amusement tax equivalent to 30 percent of the gross receipts. While rates had not been the same (30% being the maximum) all the time, less producers ventured having been too scared since paying thirty percent Amusement Tax automatically puts the project in the red. The following is a financial analysis of a standard dinner show on a regular day.

Notice that a show gives only 10 percent ROI (return on investment) based on a 100 percent ticket sales. The fact is, all shows give out complimentary tickets especially when ticket sales do not turn out well. Concert venues have to appear full because an empty venue can hurt the career of an artist.

After producers stopped, artists and talent managers ventured in concert production business. However, they all ended poorer than before they entered the business. Only people who can negotiate for a zero amusement tax dared finance a concert production. Thus, concerts became rare and had come far in between. Over the last ten years, live performance showed a dramatic down trend in concerts.

In contrast to pop concert, theater which are exempted from amusement tax increased in the number of production.

Amusement tax is onerous when levied on live performance of any sort because it has a very limited earning capacity. Live performance can only make one act in a day and can run for a maximum of four days.

Along the same line of argument, live performance should not be lumped together with movies. Compared with a live performance, one movie can be played in as many as 1,414 (total number of movie houses in the country) venues , in as many as four screenings a day and run as much as one month.

Live performance could be a very strong augmentation to the tourism industry. While we do not have the thousand year-old pagodas of Thailand, our only centuries old historic places can be very competitive when these are blended with musical repertoire. Let alone, the abundant Filipino talents in music is a tourist attraction in itself. No other country in Asia can compare with the enormous potential of Filipinos in music that could even make the Philippines a musical entertainment capital in Asia.

Amusement tax is not the only means artists can add to the economy. Aside from the VAT, performing artists are deducted 10 percent withholding tax for every contract. This debunks the impression that artists are notorious in paying taxes. The amusement tax has killed the cow that produces the milk. Because of too much extraction, the cow died and now, there is no more milk for everybody.

Live performance has only so much to give. Beyond a reasonable taxation, no industry can thrive. The Philippines can be the musical entertainment capital of Asia if only enough incentives are given to promote productivity in the sector. The government has in fact admitted that one of its pole-vault strategy announced during its June 1997 National Development Summit is the transformation of the Philippines as a center for culture and arts in Asia.

To the honorable people of the Congress, the live performing arts is pleading, "HELP US SURVIVE. EXEMPT US FROM AMUSEMENT TAX".