South Africa

Production rebates off to a slow but promising start

BOTTOM LINE
Upside: Good weather, a low exhange rate and English-speaking crews make South Africa an attractive location. A rebate of 15% on an entire local spend adds to the appeal.
Downside: After initial hiccups, the rebate system is slowly getting into gear and has yet to prove its feasibility.
Sources:
Cape Film Commission:
www.capefilmcommission.co.za
South African Department of Trade and Industry:
www.thedti.gov.za

The idea behind the South African production rebate was to create a straightforward system that would aid local producers and boost the production sector by attracting foreign productions. On paper, it looks simple.

Administered by the Dept. of Trade and Industry (DTI), foreign productions may apply for rebates on 15% of what they spend in South Africa. Local productions receive 25%. Foreign or local, the rebate ceiling for each pic is set at $1.64 million. Qualifying pics must be budgeted at a minimum of $4.1 million.

However, since the program’s launch last summer, producers have been frustrated with the slow bureaucratic process involved. An many have yet to see any actual cash.

“The scheme has obviously had some teething problems, and it’s taken a while after the announcement of the rebate for a system to be put into place,” says South African producer Philip Key. “But the government was keen to launch the system and fine-tune it in the process of working with it, rather than spend a long time planning and then realizing that there are still problems.”

Key works at Moonlighting, the South African production service company on Robert Towne’s “Ask the Dusk,” starring Colin Farrell and Salma Hayek.

“It’s been a slow and painful procedure getting everything up and working,” admits the DTI’s Nadia Sujee, who’s played a key role in implementing the system. “But we’ve smoothed out the initial problems in the processing of the applications. There is now a 30-day turnaround period for the provisional certificates based on provisional budgets. The turnaround for the final approval is six weeks.” (Producers should file for the provisional certicate prior to principal photography.)

The first round of certificates were issued recently. Ten pics got an official stamp of approval. Six of them are foreign, including “Ask the Dusk” and Andrew Niccol’s “Lord of War.”

Overall, the DTI has set aside $37 million to hand out to producers over three years. After that, “the impact of the rebate will be assessed and a decision will be made as to whether or not to continue the support,” says Sujee.

The DTI has conducted a survey among producers and some have been asking for changes to the current setup.

“I think it’s an excellent system, but I would like to see a lowering of the threshold so the rebate would also apply to lower-budget (features) and TV movies,” says Key.

Says Sujee, “There will be a review process. I’m not sure that the threshold will change. My feeling is that this won’t be the case but that we might have to develop additional supportive measures for the industry.” The DTI has appointed a consultancy to develop further strategies to support the South African film and TV sector.

For high-profile pics such as “Ask the Dusk” or the $50-plus million “Lord of War,” the rebate only translates into a small fraction of the overall budget. “But it still makes a difference and it’s certainly welcomed,” says “Lord of War” producer Philippe Rousselet.

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