ADDED FILM TAXATION

Sun (Auckland), Volume IV, Issue 1041, 4 August 1930, Page 10

ADDED FILM TAXATION

WILL NOT AFFECT ADMISSION PRICES OPINION OF EXHIBITORS WELLINGTON, *Today. The additional film taxation imposed by the Government will not affect the prices of admission to picture theatres in the opinion of motion picture exhibitors. The additions to the amusement-tax, if approved, are certain to affect the public, but the £50,000 extra duty on films is not likely to be paid by the theatres and cannot be passed on by the exchanges despite recent statements to the contrary. The Government’s proposal is not to impose a tax of so much per foot on films brought into the country, but to send taxation demands to the various film exchanges, which own the films, based on the earningpower of each picture. A footage tax is uneconomic because it penalises a poor film on the same basis as a most successful one. Moreover, had taxation been imposed on a footage basis, the film-exhibitors would have been forced to pay it, as each exhibitor has a clause in his contract providing that he will bear any such costs. However, the Government has decided to adopt the course of waiting to see what success each film enjoys and then imposing a 10 per cent tax upon it. With the advent of talking pictures last year, and the consequent increase in charges for film rent, the total paid by the exhibitors to the various film exchanges for >ire of the films is calculated to have approached the £500,000 mark. This year, however, this figure is not likely to be approached and it is considered that the total will be about £IOO,OOO. A 10 per cent tax upon this output will thus yield anything above £40,000.

The film exhibitors already pay a big sum annually ii i rates, land-tax, and income-tax, it is pointed out, and last year netted the Government a total of £BO,OOO in amusement-tax. They consider that they are already taxed highly enough. However, in tho case of the new taxation, it is pointed out, the exchanges will be unable to pass on the new because they will not be calculated until after tho films have completed their run, and because if an attempt is made to increase the general level of film rents apart from the tax, the result will not yield anything, as the industry is already charged as much as it is able to pay. Meantime, a counter-move has been launched by the exchanges, who are suggesting to the Goverment that a tax of 2£ per cent, should he struck upon the whole industry, based upon tho receipts of the theatres. In the calculation of this, it is proposed, credit shall be given the theatres for any film hire they pay and any operating charges for talking equipment, which might be debited to the various companies which supply them. These companies express their willingness to pay 2£ per cent, upon the operating charges and film hire. One of the advantages claimed for this system is that the charges arc so small that they Cannot be passed on, and must be borne T>y the motion picture industry.