Despite previously promising to announce the final foreign film tax on National Film Day today, the Ministry of Culture and Tourism has postponed its announcement because the government institutions involved are yet to reach a conclusion on the matter.
Tourism Minister Jero Wacik said the ministry, Finance Ministry and Directorate General of Taxation were still finalizing the regulation on foreign films.
“We cannot announce the exact film tax scheme yet because it is still being discussed,” Jero said.
“The regulation is aimed at protecting the national film industry without harming foreign film imports. We just want foreign films to enter Indonesia without violating the regulation. So far the Directorate General of Taxation has decided on a tax scheme, but is yet to finalize their decision.”
The customs value of imported films was previously based on the physical length of the film roll, with each meter valued at 43 cents. The government now wants to tax royalties up front under a 2006 customs law that stipulates that royalties should be included in the import tax.
The new tax calculation is behind a recent move by the Motion Picture Association to halt the export of films to Indonesia.