The local production industry is a little jittery after Arts & Culture Minister Pallo Jordan said that the government may reconsider the tax rebate it introduced for foreign filmmakers two years ago.
Addressing Parliament during Tuesday’s budget debate, Jordan said the rebate was an “indirect subsidy” of the film industry.
“While this rebate makes perfect sense from every point of view and has contributed billions of rands to the South African economy, as we begin to establish ourselves as a film-producing country, we shall have to revisit such measures so as to maximize the benefits accruing to our own industry and our own filmmakers,” he said.
Set up to enhance South Africa’s appeal to foreign filmmakers as a production destination, the rebate was introduced in August 2004. South African films and co-production treaty movies (German, Canadian, Italian, U.K.) currently qualify for a 25% rebate and foreign films for a 15% rebate of their South African spend if 50% of principal photography is done in South Africa. Expenditure must be 25 million rand ($3.6 million) or more, and the rebate is capped at $1.5 million for a single production for both local and foreign films.
Jordan also said ways were being sought to ensure that the National Film & Video Foundation, the statutory body charged with promoting and developing the local film industry, would not continue to remain dependent exclusively on the government for funds. He announced that the foundation would receive a budget of $5.26 million for the 2006-07 financial year.
Jordan’s comments are likely to worsen his already edgy relationship with the NFVF, which became particularly acrimonious earlier this year over Jordan’s refusal to renew a $5.3 million local feature production fund that was used to help finance such films as the Oscar-winning “Tsotsi” and Oscar-nommed “Yesterday.”