News / Asia

Indonesian Tax Dispute Shuts Out Hollywood Blockbusters

People walk past movie banners outside a movie theater in Jakarta, Indonesia (File Photo - February 21, 2011)
People walk past movie banners outside a movie theater in Jakarta, Indonesia (File Photo - February 21, 2011)
TEXT SIZE - +

The months of June, July and August are when Hollywood releases its blockbusters, the big-budget films aimed at appealing to global audiences. But this year in Indonesia, an ongoing tax dispute between the government and film importers continues to shut out new releases and cinema owners say it is crushing their profits.

B-grade horror flicks and Thai comedies like Dear Galileo, are among the limited choices facing Indonesian moviegoers this season. Nearly four months after the Motion Picture Association of America stopped sending films to the country in protest against a new tax levy, Indonesians say they are frustrated and embarrassed by not having access to the latest blockbusters.

Film buff Walter Francine says he fears missing out on big-name summer sequels, some of which are already showing up in neighboring countries.

“We’re quite disappointed actually," he said. "We cannot see Thor, Green Lantern and then Pirates of the Caribbean maybe. Some of my friends may be going to Singapore.”

In January the Indonesian government announced it would start enforcing a long-neglected regulation that slaps an up-front royalty duty on imported films in addition to a customs tax that already charges importers $0.43 cents per meter of celluloid.

The Motion Picture Association, which represents major studios such as Walt Disney, Paramount and Universal, says the royalty tax is unfair since it seeks to put a value on films before they have earned any revenue.

Meanwhile, Indonesia’s tax department has billed its three main film distributors $3.6 million for two year’s worth of back taxes. It has suspended their import licenses until they settle up.

One importer recently paid, but the other two are fighting the government in tax court. They are part of the dominant Group 21, which controls more than 80 percent of the 620 screens in the country and is the sole importer of Hollywood flicks.

The Indonesian government says it is enforcing the royalty tax to boost the local film industry, but one cinema group leader believes it is in reaction to importers not fulfilling their tax obligations.

Figures for Indonesia’s total box office take vary between $90 million to $150 million, slightly below Singapore, but twice as big as Thailand. With a population of around 240 million people and a rising middle class, there is plenty of room to grow, says Ananda Siregar, the head of Blitz Megaplex, Indonesia’s second-largest cinema chain.

“Unfortunately, with the current situation happening, the ones who are going to benefit are either the pirates or Singapore, because most Indonesians who can afford to go to Singapore will fly up there and watch Kung Fu Panda there instead of in their own country, which is very sad,” said Siregar.

The government says it is working to resolve the royalty duty, but Siregar worries that even if that issue is resolved, films will not start flowing back into the country until the distributors pay their back taxes.

Since the film boycott started Blitz has shortened its operating hours and closed some screens on a rolling basis. The head of Indonesia’s cinema union says theaters have reported a 60 percent drop in revenue and independent cinemas are in danger of closing permanently.

Some moviegoers say they understand the principal behind the boycott. The distributors should pay up, they say. As Arie Jony waited in line outside Jakarta Cineplex, he says the loss of revenue only harms the industry.

“It’s very disappointing for me," he said. "Plus it will push people more to buying pirated videos, they will tend to download more films from the Internet and everything. So in my point of view there is nothing to gain by this ban.”

While pirated DVDs are available for even the latest Hollywood releases, many Indonesians say they miss seeing the films in the theater.  Jony says he has stopped his weekly movie theater visits because of the limited selection of films. Moviegoer Amanda Waworunto says she too is dismayed by the lack of international offerings.

“We actually admit that Indonesian film is very bad quality, so I will never watch it in theater anyway,” she said.

A few Hollywood films from smaller studios not involved in the MPAA boycott are reaching Indonesia. The latest release, Scream 4, arrived nearly a month after its debut in the U.S. Meanwhile, movie-goers are missing out on Kung Fu Panda 2 and the latest installment of the Pirates of the Caribbean series. Many worry about being left in the dark when Harry Potter and the Deathly Hallows: Part 2 is released in mid-July.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid