By: Our Correspondent

In what appears to be a misguided attempt to stimulate Indonesia’s
flagging domestic film industry, the government has told theatre owners
it intends to introduce a new 23.75 percent excise tax on foreign films,
effectively halting their distribution in the country.

Importers
already have to pay a cumulative tax between 43.75 and 48.75 percent in
excise duties, central government taxes and taxes on profit from ticket
sales for local governments. However, critics are warning that the new
tax, which would mean a cumulative total up to 70 percent in taxes and
duties, would effectively kill the industry outright, both for domestic
and foreign films. That, they say, would put 10,000 people directly
employed in the industry out of work as well as thousands more who sell
drinks and snacks, and would almost certainly provide a huge boost to
sellers of pirated DVDs.

Noorca Masardi, a spokesman for the 21
Cineplex chain, told the Jakarta Globe that 21, Indonesia’s largest
movie theater chain, with 500 screens, would only continue to screen
foreign films that are already showing.

"[After this], we will
not be able to screen any more imported films until the customs
department changes its policy on film distribution in Indonesia," he
said, adding that this applies not only to movies from the United States
but also Europe and Asia.

The Motion Picture Association on
Thursday told journalists at a preview for "Black Swan" that the
Oscar-nominated movie was likely the last foreign offering it would
bring into this country because of the new levy on imported film
distribution.

Government officials involved in the matter have
repeatedly declined to provide details of the new levy, saying only that
talks were ongoing.

No other country has similar levies on
foreign films although several use other methods to control
distribution. China historically has sought to use the film and
television industry to mould or protect the country’s culture. The
government only allows about 20 foreign films into the country each year
and in 2006 banned foreign cartoons from Chinese prime-time television.

As a result – a lesson the Indonesian authorities might learn
— film pirates do a roaring business, with some hit foreign films on
China’s city streets even before they are in wide distribution in their
countries of origin. As with Indonesia, France historically has fought
hard to protect its domestic film industry as a cultural imperative, not
always successfully.

"Every year, cinemas screen 50 to 80 local
titles and 100 to 150 foreign titles," Masardi told reporters. "If the
government does not revoke this new policy, it will kill the cinema
industry in Indonesia," he said. "If no solution is found, Indonesian
cinemas will close down one by one."

Indonesia’s film industry
has suffered a downturn in recent years. In 2009, six local films sold
more than a million tickets each at the box office. In 2010, only one
movie broke the million mark. Last year, 81 Indonesian films had cinema
releases, slightly down from 83 films in 2009, although a significant
decline from 91 big-screen releases in 2008.

Members of the MPA
include some of the biggest studios in the United States, including Walt
Disney Pictures, Paramount Pictures, Sony Pictures Entertainment,
Twentieth Century Fox Film, Universal Pictures and Warner Bros.
Entertainment.

With reporting from Jakarta Globe