The tax controversy threatening to end the importation of foreign feature films in Indonesia has apparently been resolved with the agreement to replace the myriad of taxes now charged on imported films to a single tax regime.
NusaBali reports that the Minister of Culture and Tourism Jero Wacik has reported to President Susilo Bambang Yudhoyono the results of an agreement reached with the Coordinating Minister for the Economy Hatta Rajasa and the Minister of Finance Agus Martowardojo.
"In that meeting we agreed to create a single tax. But we will (first) report all this to the President because matters related to national taxation must be decided by him. So, it can't be decided by the Director General of Taxation, it has to be the President's decision," explained Wacik.
Wacik insists that the agreement will protect Indonesian films. Said Wacik: "More films can be produced because of low taxation, but with imported films continuing to be imported in order to meet the demand of theaters that stand at 600 and are targeted to become 1,000 by 2014."
A "single tax" system will see films pay an import tax upon importation with no additional taxes to be imposed after that.
Wacik did not disclose the tax rate to be charged on foreign films, saying that was the prerogative of the Minister of Finance and the President to decide.
In order to encourage local film making, the custom's duty for imported film stocks has been reduced to zero.
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