Indonesian audiences now will be heartened to know that the government has finally moved to end a running feud with movie importers, announcing a new film tax regime.
Finance Minister Agus Martowardojo on Friday said importers now need only pay a specific tax for the films, providing a simple solution to the long-running dispute over royalties for movies from overseas.
According to the new rules that became effective on Thursday, importers only have to pay Rp 21,000 to Rp 22,000 per minute for each copy of the movie they screen. With a viewing time of 100 minutes, the tax on the average feature would be as little as Rp 21 million ($2,500).
Previously the importers had to pay an ad valorem tax for each movie they brought into the country. Such a tax takes a percentage of the value of the good or service, in this case ticket sales.
The movie value calculation was problematic because it was based on royalties, which depended on how well attended a movie was in cinemas. This meant the tax could not be determined at the time the film was imported. In one side Indonesian should agree if the tax should be paid for the country. But in the other hand, that new tax rules make box office movie dissapear from Indonesia.
A specific tax, however, is a sum imposed on an item regardless of its value. Of course that is a more simple and easy was to calculate the tax. And, of course it's relieving for the audiences.
Hopefully in the future .film producers would establish their representatives in Indonesia and form a joint venture with local business partners. So Indonesia will be a good rival for bollywood movie.
In February, the Motion Picture Association said its members would stop sending films here after the government decided on a new system of calculating and charging royalties on such films that the MPA said had “a detrimental impact on the cost of bringing a film into Indonesia.”
About a week later, the government announced that certain importers were, in fact, not allowed to bring in films because they owed about Rp 30 billion in back taxes from the two previous years. This substantial amount accumulated because they had not reported their royalties, and as such faced fines of up to 10 times that amount.
But even is all the hurdles are cleared, it will take up to three weeks before foreign films make it back to local cinema screens. Hopefully Pirates of The Carribean don't dissapear yet before "visiting" Indonesia. I love that movie soo much, and I do believe also many of Indonesian will miss Pirates too!!!
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