Novita Hardini, a member of the Indonesian Parliament's Industry Committee, reported that the imposition of double value-added tax (VAT) on the film industry obstructs its growth and negatively impacts local creativity. This statement was made during a meeting with several film associations and companies at the Parliament complex in Jakarta.
Hardini pointed out that the current tax system imposes VAT twice: first during the production phase and again during distribution or screening. This creates an additional financial burden on local filmmakers, reducing their profit margins.
Event Details
During the meeting, Hardini raised questions about how the Indonesian film industry can compete globally under these tax burdens. She considered these policies to be an obstacle to creativity and a discouragement for local filmmakers.
Hardini also addressed the issue of the lack of cinemas in Indonesia, noting that their number does not match the significant increase in local film production. She explained that many good films are forced to wait long periods for screening, negatively affecting the economy and the morale of creators.
Background & Context
Historically, the film industry in Indonesia has seen remarkable growth in recent years, with local productions increasing significantly. However, current tax policies have not evolved at the same pace, leading to a gap between production and exhibition.
The cinema is an important part of Indonesia's national culture, reflecting local identity and history. Nevertheless, economic and political challenges have affected the industry's ability to thrive.
Impact & Consequences
If tax policies are not reformed, the Indonesian film industry may face further challenges, potentially leading to a decline in local production and job losses. This could also affect Indonesia's ability to present distinctive cultural content on the global stage.
Cinema is also a significant source for promoting tourism, as it can play a role in attracting tourists to the locations where films are shot. Therefore, supporting this industry can contribute to enhancing the local economy.
Regional Significance
Arab countries could benefit from Indonesia's experience in developing its film industry, as many Arab nations face similar challenges. It is essential for Arab governments to adopt policies that support artistic creativity and alleviate the tax burdens on creators.
Enhancing cooperation between Arab countries and Indonesia in the field of cinema could facilitate the exchange of experiences and promote joint production, enriching Arab culture.