A friend of mine came to Singapore the other day and during her trip here, she makes the best of her time to watch Hollywood movies that is currently playing in the cinemas. “It has been a while”, she said, commenting that there are no new Hollywood movies that are playing in the cinemas back home in Jakarta. Perhaps the last time a Hollywood movie came out was in February. Preposterous! How can it be that there are no foreign movies playing in Indonesia? What happened? Whom do we complain to if we want the movies back in our cinemas?
It turns out that the bottleneck to this problem was the new tax policy on film imports in Indonesia. I made out a cheeky diagram to see what’s causing the commotion and the related cause and effects here:
The above diagram is just out of my own quick analysis, based on news articles and the existing film industry regulation in Indonesia. I haven’t gone through all the details, so I welcome comments and corrections.
True, what the government is doing is only to implement what has been long due, that the royalties and the physical reels of celluloid on imported films are taxable. The importers owed the government Rp 31 billion ($3.6 million) in back taxes for the past two years’ worth of imports, which is now in the process of the tax tribunal. In the meantime, the importers decided to stop importing the movies. Alas, the poor consumers are left with no movies to watch, seeing that their much awaited summer box-office hits such as Harry Potter, Pirates in the Caribbean, etc., are being held in hostage.
To be fair, not all domestic movies are filled with pseudo-porn-horror content, but this is what sells in the market. If it’s profitable, then producers will continue making it. I’m puzzled why they are released in the first place, doesn’t the film censorship board do anything?
If you want to support the development of the domestic film industry, there are other ways of doing it other than taxes. For example, how many film schools are in Indonesia anyway? What about copyright protection, so that domestic movies are not being pirated in their own country? The movie industry is a creative industry, thus protection of these creations are needed to proliferate better quality movies in the long run.
Although the cause of this problem might be related to the tax policy on film imports, I would like to argue that the conundrum also lies in Indonesia’s current structure of film import and distribution.
The three main film importers belong to Group 21 and they control the local distribution rights of Hollywood movies to their own chain of cinemas, Cineplex 21. They have long dominated the film import and distribution business, mostly when it was facilitated during the era of Soeharto. Even with the entry of Blitz Megaplex in 2006, who also buy the films from Group 21, they are still dominant. In 2009, Blitz filed a case to the Competition Commission (KPPU) but it was dismissed due to lack of evidence.
If only the competition in the film import and distribution were fairer, I believe we would have more access to good movies, both from foreign and domestic sources. At the time of this blog post being written, I have yet to find a Ministerial Regulation (from the Ministry of Culture and Tourism) on film distribution. It was mandated by the 2009 Film Law but the regulation is nowhere to be seen.
It would be naive to think that the cost of this stalemate is only about the disappointment of movie fans. I can list down a couple of impacts of this issue:
- What about the livelihoods of employees in the cinema business?
- What about the malls and restaurants that complements the cinema business?
- Wouldn’t the government get less revenue out of this whole mess?
- Wouldn’t the demand for pirated DVDs increase because of this? Ergo, even lesser revenue to the government?
As you can see, the longer the government and the importers delay on this issue, it will only get costlier. Therefore, it is wise for them to act promptly, and for us consumers to demand our rights: we want our movies back!