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New Film Import Duty, What 21 Cineplex Says

The government has signed the revision of Finance Minister Regulation on film import duty. In this new provision, the royalty tax by ad valorem (percentage) is changed to a specific import duty. The tariff is between Rp21,000 and Rp22,000 per minute a copy.

Finance Minister Agus Martowardojo explained, since 1996 film import duty is based on royalty calculation. However, the Finance Ministry’s auditing result showed that the excised tax through this mechanism did not go perfectly and thus had to be revised.

In addition, the calculation of the royalty tax imposed on film imports usually took some time. Let alone the process was deem complicated.

Based on the findings, the Finance Ministry observed that the system of import film tax imposition must be changed from the current one, based on ad valorem, to a value-based, that is a specific value multiplied by the film duration and multiplied by the number of copy.

As regards the policy, 21 Cineplex spokesperson Noorca Massardi did not give any comment. He reasoned that he did not know about the policy yet. “I’m sorry, I don’t know about it. Please ask Motion Picture Association of America (MPAA) directly,” he said.

MPAA is an American film distributor association. The problem is it is signaled that so far MPAA has only been willing to cooperate with three troublesome film importers. The finance minister questioned this allegation. Martowardojo viewed that if MPAA wanted to cooperate with the three tax problem-stricken importers, it did not keep a good record.

The government instructed film importers to pay the outstanding tax import duty. The importers then filed an appeal at Tax Court to solve the dispute. Out of three importers holding a large market share, between 90 and 95 percent, only one had paid the fine of Rp9 billion.

The Finance Ministry also revealed that the additional import duty payable by the foreign film importers for the last two years was Rp30 billion, from 1,759 copies of film. However, this is excluding the payable fine between 100 and 1,000 percent.

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