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Film Rules Must Better Health

The government will seek a way out in response to objections movie importer of tax provisions that resulted in American film producers association states would no longer circulate Hollywood film to Indonesia. The government also needs to review the taxation film to make this industry more healthy and competitive.

Acting Head of Fiscal Policy and the Ministry of Finance Bambang Brodjonegoro Deputy Coordinating Ministry of Economy Trade and Industry Edy Putra Irawady deliver it separately in Jakarta, Saturday (19/02/2011).

Earlier, Vice President of Motion Pictures Associatian (MPA) for Asia Pacific, Frank S. Rittman, last Thursday, stating that the association of U.S. producers of this film decided not to distribute the film in Indonesia during the government still impose a new tax provisions related to the imposition of royalties for foreign movies .

On January 10, 2011, the government issued Circular Letter No. SE-3/PJ/2011 Director General of Taxation on Income Tax (income tax) on income and Treatment Form of Royalty Value Added Tax (VAT) on the Importation of Film Import. Finance Minister Agustin Martowardojo mention this as part of tax reform in the film industry in Indonesia.

This circular states, income paid to abroad by the importer relating to use of copyright in films imported by certain requirements are subject to a royalty tax of 20 percent. Taxation of royalties to foreign movies is nothing new, while the national film royalties already been taxed.

Royalty tax to the national film is set in the Regulation of the Director General of Taxation Number Per-33/PJ/2009 on Treatment of Income Tax for income from the Result of Work Form of Royalty Cinematography.

In addition to regulate royalty tax provision for foreign movies, DGT Circular issued last January also change the calculation of VAT which is levied on imported films.

Previously, imported films subjected to import duties, VAT, and income tax is only based on the length movies, regardless of the type and price of the movie.

“We put on approximately 0.43 U.S. dollars per meter as the basis for the imposition of customs duties and VAT and Income Tax,” said Director General of Taxation Tax Regulation I Suryo Utomo when announcing the issuance of Circular Letter of the Director General of Taxes, January.


Release of imported films from taxes and royalties during the imposition of low tariffs, VAT, and income tax for imported films assessed contributed to the national film industry is not competitive to compete with imported films in their own country.

“As a work or finished goods, Movies into Indonesia has two aspects of taxation, namely the import of goods and the payment of royalties or rights to the film’s utilization by the parties are allowed to circulate,” said Suryo Utomo.

The imposition of tariffs with a fixed base value calculation, which is 0.43 U.S. dollars per meter film, felt hurt because the price of an imported movie can be far more expensive than that. Therefore, the rearrangement is considered important.

Separately, Edy Putra Irawady affirm, increase tax rates on imported films as finished goods is actually a natural thing. World Trade Organization or the WTO allows member countries, including Indonesia, to protect their domestic industry by applying import duties on goods entering the domestic market.

“I think it’s fair if there are import tariffs for finished goods (foreign movies). For, had become our rights in the WTO to implement duty tariff, even up to 40 percent, “he said.

However, Acting Head of fiscal policy the Ministry of Finance Bambang Brodjonegoro emphasized that the government still would discuss this with the tax provisions movie importer. By doing so, the Government of Indonesia, in Indonesian society moviegoers, or the importer of the film are equally not be the aggrieved party. “The government and importers are looking for a win-win solution for the provision that,” he said.

Movies threatened

MPA-related decisions, cinemas across Indonesia since 17 February of this year can no longer play the movies Hollywood’s major producers of MPA members. This is troubling employers cinema and film audiences in Indonesia.

Founder and drafter Blitzmegaplex, Ananda Siregar, said the number of Hollywood films that played during the Blitz is about 80 to 90 titles per year, or about two-thirds of all movie titles that is playing Blitz. The rest, it plays movie cinema network of national and foreign non-Hollywood films. “So, the impact is very negative. If sustainability is troublesome, “said Ananda.

Explained Ananda, distributor of non-Hollywood foreign films can actually fill the emptiness of Hollywood films in cinemas Indonesia. However, he feared other foreign film distributors will also objected because the provisions of this duty applies to all imported films.

National film can also be encouraged to fill the screen Blitz. However, the move can not be in the short term. “The production of local films can indeed encouraged, but not time-consuming process. If supply is not sufficient, “he said.

Chairman of Joint Theatre Company All Indonesia Djohny Sjafruddin argues, government policies can actually threaten the national film industry. “In general, this industry consists of upstream and downstream sectors. What would crumble is downstream, ie cinema, because most of the theaters playing foreign films, especially from the U.S., “he said.

Based on data from the Film Censorship, in 2010 there were 180 imported films and 81 national films that screened in cinemas country. “National Film can not permanently support the cinema. So, if there is no supply of western movies, the cinema industry will be destroyed first, “said Djohny.

This shortage is reflected in the website 21cineplex example. Agenda film that will run until Saturday just filled with four national film: Redeem, Pocong ngesot, House Without Windows, and Girl Saweran.


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