PRAGUE — Czech President Vaclav Klaus, a strong free-market proponent, has vetoed a proposed tax on exhibs, distribs and terrestrials intended to fund the anemic Czech film industry.
The state film fund, now at around $3 million, is left with no real prospects of other revenue for the foreseeable future, leaving local producers worried.
Unless they can get enough votes in Parliament to override Klaus’ veto, Czech filmmakers will remain stuck with royalty fees on national archive films as their main funding source, a system that barely produces a trickle.
The Audiovisual Producers Assn. has been pushing instead for a 3% tax on homevideo and DVD rentals and TV commercials and 2% tax on cinema tickets, estimated to be worth an additional $6.6 million.
Ex-Barrandov Studios exec Radomir Docekal, a lobbyist for the tax, has argued it’s essential to keep Czech filmmaking alive, pointing to the lean $1.2 million average budget of Czech films.
Even TV Nova, owned by Ron Lauder’s Central European Media Enterprises, which would be taxed for the largest amount by far under the system, was essentially resigned to some form of the levy, according to CME topper Michael Garin.
Instead, Klaus stopped the bill in its tracks late Friday, issuing a blistering critique that accused lawmakers of unfairly supporting “commercial” art while doing nothing for equally worthy media such as visual art, literature and music.
“There is no reason why it is entrepreneurs in cinematography who should alone have certain privileges, and not other, comparable branches,” Klaus said.
The Czech Film Center, another proponent of the tax, was thrown a curve by the veto. The center’s Jana Cernikova, working from an office funded solely by the film industry, is also the main proponent of tax breaks for foreign productions, estimated as worth some $300 million annually. Thus far the Czech Republic lags behind other former Soviet bloc countries in offering such incentives.