CULTURE-BRAZIL: New Boost for Film Industry

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Sep 10 2001 (IPS) - Brazil’s filmmaking industry has been given a boost, in the form of a newly created regulatory agency and additional funding, although the new measures are a slightly watered-down version of what filmmakers were pushing for.

The measures adopted by the government left aside filmmakers’ most controversial proposal: a four percent tax on the gross revenue of TV stations, that was to go towards the national movie industry.

The government’s provisional measure (a presidential decree that goes into effect immediately) that entered into force last Thursday did, however, create a “Contribution to the Development of the Motion-Picture Industry” fund whose resources will come from film distributors, TV stations, video rental outlets and Internet film and video marketing companies.

In addition, revenues earned on foreign movies in Brazil that are transferred abroad will be subject to an 11 percent tax, while a 3,000 real (1,200 dollar) fee will be charged for each foreign film shown in movie theatres, on TV, or on video in Brazil.

The new measures brought an outcry from U.S. movie distributors, which dominate the motion-picture market in most of the world, and control nearly 90 percent of the market in Brazil.

But investment by foreign companies in co-productions in Brazil will be tax deductible. Furthermore, through associations with Brazilian producers, foreign firms will obtain an up to 70 percent discount on the 25 percent tax already levied on their earnings.

The provisional measure also set a two million real (800,000 dollar) cap on fines charged by the National Film Agency (ANCINE) for offences like bootlegging or the failure to hand over data to the System of Information and Monitoring of movies and videos.

The data required refers to the names of all national and foreign films screened in Brazil, the number of movie-goers, the length of time the films showed, and the revenues taken in. The objective of the data collection is to exercise closer control over box office earnings.

The revenues attained through the implementation of the new provisions will go towards covering the expenses of ANCINE and to expanding national production, which in the past six years averaged just 25 full-length films a year.

The provisional measure must be approved by parliament to remain in effect, and lawmakers can modify it.

The measures were drafted by a commission set up by the government and headed by the minister of the “Casa Civil da Presidenca”, Pedro Parente. Representatives of the recording, broadcasting and film industries also sat on the commission.

The proposed measures came out of the third Brazilian Congress on Film, which brought together filmmakers and others involved in the movie industry in July 2000 to discuss what was to be done to bolster the national motion picture industry.

The 1970s were the golden age of Brazil’s film industry, with respect to the number of films produced and box office earnings, thanks to the Brazilian Film Company, a government body that subsidised production. But when the agency was dismantled in 1990, national filmmaking fell into decline.

A timid rennaissance began in 1994, triggered by action taken by the Ministry of Culture and the creation of tax incentives that encouraged investment in movie-making. However, the stagnation of that form of financing led filmmakers to propose the new measures.

Under the new provisions, policies designed to develop the national movie industry will be decided on by a Higher Council on Film, made up of seven government ministers and five representatives of the national movie-making and video recording industries.

Heavy pressure from TV stations led President Fernando Henrique Cardoso to eliminate the proposed tax on that sector’s revenues.

But most of the recommendations set forth by the filmmaking industry were adopted, and “the essence of the proposals” was maintained, said Luiz Carlos Barreto, Brazil’s leading movie producer.

The struggle for obtaining contributions to the filmmaking industry from TV stations will continue, when parliament discusses the provisional measure as well as a draft law on broadcasting currently making its way through the legislature, said Assunçao Hernandes, the vice-president of the Brazilian Congress on Filmmaking.

Distributors criticised important aspects of the new measures. But according to Barreto, complaints referring to taxes on foreign films are simply not justified, because it costs foreign movies just a few thousand dollars to enter Brazil, where they compete with national films that cost an average of one million dollars to produce.

But the grievances of one sector are likely to be heard by both filmmakers and parliamentarians – the objections set forth by alternative distributors, dedicated to art films or movies from countries that participate in a limited manner in the international market, like Iran or India.

These small companies can only survive if they receive special treatment, warned the Sao Paulo Association of Independent Distributors.