Govt Still Deadlocked In Film Tax Dispute

The Jakarta Globe

A week after a new tax scheme was announced to end the foreign film boycott, there was still no word on when Hollywood blockbusters would again hit the country’s big screens. 

Ukus Kuswara, head of culture, arts and film at the Ministry of Culture and Tourism, said the next big issue that needed to be resolved was the matter of unpaid royalties to the government. 

The Ministry of Finance announced the new tax scheme last week, with importers now only needing to pay a specific tax on films, providing a simple solution to the long-running dispute over royalties for imported movies. 

But the issue of unpaid royalties over the past two years — totaling about Rp 31 billion ($3.6 million) from three major importers, according to the government — has yet to be resolved. Only one of the three importers has settled its bill and is now allowed to import films, although it deals mostly with small, independent movies. 

Widhi Hartono, head of audits at the Customs Office, said the other two importers had filed appeals against the government’s demands for unpaid royalties. 

“These two are still banned from bringing in films pending a court decision,” he said. 

The two importers are understood to be largely responsible for bringing in the big Hollywood movies. 

But Djonny Sjafruddin, head of the Indonesian Cinema Companies Union, said the issue must be resolved once and for all. “Unless the government solves this problem properly, more than half of Indonesia’s cinemas will be closed within four months,” he said. 

Ukus said the government was working on a win-win solution. “We are having intensive meetings [with importers] to find out what problems they’re facing,” he said. “Once we figure out the problem, we’ll find the solution to bring back films so people don’t have to go abroad to watch them.”

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