The sexy issue was that a new regulation issued by the Indonesian Directorate General of Customs and Excises will affect movie distribution rights. In response, the culturally powerful Motion Picture Association (MPA) of the United States was to stop sending its productions here.
As reported by the media, since February 17, 2011 American movies are no longer screened anymore in Indonesian cinemas although in reality Hollywood movies continued to be shown as usual. The muscle-flexing approach has resulted in the projected aims, anyway.
Indonesian moviegoers have been in an uproar over the reports, citing disappointment over a possible unpleasant reality when their life might be sans inner satisfaction from seeing those hotly glitzy American scenes on the screens of their favorite cinemas here.
The Indonesian tax authorities were said to implement their plans to increase tax for imported movies up to 43 cents rupiah (about 0.000048 U.S. dollars) per meter. The tax was aimed at protecting local industry, improving production from averagely 85 titles per year to 200.
Imported films already pay a 23.75 percent excise duty and another 10 percent income tax. Local governments also levy up to a 15 percent tax on ticket sales.
A self-proclaimed movie freak, Rizky Danurwindo, writes in his blog that he was really disappointed with this situation. "At least I visit cinema once a week, even I once watched seven different movies in seven consecutive days," he said, adding he goes to cinemas after the class ends.
Danurwindo adds that he is addicted to movies as motion pictures broaden his perception and enriches his knowledge. "Film is a basic need for me. Lots of bittersweet memories happened in cinemas and I can`t imagine if only Indonesian films showed in cinemas."
The absence of Hollywood movies is an epic fail in this country. Imposing film tax is a stupid policy because it affects many aspects. Government will lose its income from tariff of film reels, added-value tax, and taxes on shows and cinemas, he writes on.
He glances over to the internal condition, saying if Indonesian filmmakers want to use the favorable circumstance, they have to increase capitals in order to produce good-quality films. Levying film tax implicitly indicates that government does not appreciate the film communities or in other words, they support the widespread of piracy.
"I believe Hollywood movies will return to Indonesian cinemas soon as film studios in Hollywood have been scheduled to release their masterpieces this year and I`ve planned to see it in cinema. Long live Hollywood movies," says Danurwindo.
No New Regulations
It seems that there has been much ado about almost nothing in this regard if the tax authorities are to be heard. "There`re no new regulation on imported films," said Heri Kristiono, Director of Technical Customs, Directorate General of Customs and Excise (DGCE) in a press conference at the DGCE headquarters in Jakarta last Monday (Feb 21).
The DGCE was in full team on that occasion as Kristiono was flanked by the Director of Audit Usman Hanafi, Director of Revenue and Customs and Excise Regulations Kushari Supriyanto and Djoko Waluyo from the Finance Ministry`s Fiscal Policy Agency (BKF).
Addition of royalties to be included in the customs value has suited to WTO (World Trade Organization) Valuation Agreement that has been ratified by Law No. 7 of 1994 and adopted in Law No. 10 of 1995 amended by No. 17/2006 on customs that set provision of the Customs Value.
Classification of imported films is included in the HS code 3706 with the imposition of import duty tariffs by 10 percent, 10 percent on import VAT and Income Tax article 22 of imports by 2.5 percent. Customs value-added merely follows the rules of compliance.
"It is because for all this time, the domestic importer of foreign films does not include royalties to the customs value of foreign films. Importers only state the cost of printing copies of the film," Kristiono said.
He added the BKF had held meetings with leaders of the National Film Advisory Council (BP2N), whereby it stated the current calculation of the customs value of imported films based only on the price of printed copies of the film, not including royalties and profit sharing rights.
Palace`s Statement
The uproar over the issue was sparked by a statement of President Susilo Bambang Yudhoyono in a cabinet meeting in December, saying he had concerns over tax issues - that he thought largely was still imbalanced and unfair to the people - after reading a remark in media by Indonesian top filmmaker Hanung Bramantyo.
Hanung said that the government had killed the national film industry by levying too high tax on the national film industry compared to the tax levied on imported films.
"I`ve felt moved by his words. This is certainly a wrong (situation). How can we develop the national film industry if the tax is levied that way. So, please check it over and study it whether or not that was correct. If it (tax policy) proved to be wrong, then make the necessary improvements," President Yudhoyono said.
As the issue snowballed, Bramantyo said there have been nothing wrong both with his remark or President Yudhoyono`s statement. Defending his reason for having sent a complaint letter to the government over the issue, he said was just apprehensive that the costs for making movies was higher than importing them.
"In fact, my concern was on the national films. Just imagine if I were to make a movie but the tax is higher than those for importing it," said Bramantyo at get-together event at Gandaria City, Jakarta, last Wednesday evening (Feb 23).
So, there apparently have been no words of requesting for more taxes to be slapped on imported movies.
"But the most important thing from this happening is that the government may realize how important is film. Films have become the public`s demand, not just an entertainment. So, please support the national films," the man in the spotlight said. (*)
Reporter: By Vicki Febrianto
Editor: Kunto Wibisono
Copyright © ANTARA 2011
