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What's Wrong with this Picture?

Largest Theatre Chain Says New Taxes on Foreign Films will End Public Showings of Hollywood Hits in Indonesia.

(2/21/2011) The operators of Indonesia's largest chain of theatres 21 Cineplex has issued the warning that new foreign films will soon cease to be shown at Indonesian cinemas in the face of the intolerably high taxes imposed on overseas features. In addition to a 23.75 percent excise duty, a 10 percent tax payable to the central government, and a 10-15 tax on profits collected by regional governments the government is now said to be seeking yet another 23.75 percent distribution tax.

A spokesperson for 21 Cineplex who operate some 500 screens has said the high taxes will make the showing of foreign films in Indonesian non-viable.

The government is refusing to comment on the new tax.

Has Someone Lost the Plot?

Film observers point to the new tax as yet another example of poor policy planning by government officials, citing that no tax will be collected if foreign films cease to be shown in Indonesia. Moreover, the only party likely to profit from such a move is the huge, non-taxed informal sector of the Indonesian economy dealing in pirated films.