FILM HIRE TAX.

Press, Volume LXVI, Issue 20025, 5 September 1930, Page 16

FILM HIRE TAX.

REQUEST FOR ENQUIRY. CONTRACTS NOT TO BE RENEWED. X [THE PEESS Special Servlc*.] WELLINGTON. September 4. A request for an enquiry into tho effects of tho film hiro tax was rnadu to ilia .Minister for Interna] Affairs, tho Hon. I'. A. do la Perrelle. by a deputation representing the exliibitois to-diiy. Reference to the alleged boycott or New Z<ialnnd by tho American distributors was made by Mr J. Robertson, who said that although it was liardlv right to state that the Dominion was actually to be boycotted, it was a fact that tho distributors had refused to renew existing contracts ou their expiration. Definite advice to this effect had been received, and it this threat were carried out the complete collapse of the motion picture industry in New Zealand would result. The Minister assured the deputation that he would place the for an enquiry before Cabinet. "I'roin the information before the Government.'" said Mr de la I'errelle, '"it is very ciuestionablo whether the action of the film renters is aimed wholly or even mainly at the film hiro tax tor the following reasons: — A Comparison. •• (.It In Australia Sir Victor Wilton, president ot tho .Motion I'icturo Distributors' Association, estimated that tho Customs duty placed on tilm during the present vcar would produce a revenue of £'417,000. From the figures available this amount appeals to bo approximately the same percentage of the Australian tilm rentals as tho Netv Zealand Customs and film hire tax together aro. of the New Zealand film rentals. "C2) Tho figures supplied by Sir Victor Wilson, which covered per cent. of the American film, showed that tho payments made for film it l New Zealand by exhibitors had increased at a considerably higher ratio than thoso in Australia. J'or the complete year, lOl'D the rental paid in New Zealand represented 20 per cent of tho Australian rentals, but lor the first six months of this year, the New Zealand percentage had increased to •2G.3. As the Australian rentals amounted to over £1,000.000. _ additional percentage paid by New Zealand exhibitors represents approximately £'07,000. These figures aro confirmed by the relationship between expenses and film hires in the two countries for the same periods. it would therefore appear that tho New Zealand exhibitors are payine in extra film hires, not only the whole of the film hire tax. but a considerable margin in addition. "C 3) The net receipts from irm hires in New Zealand in 1027. as shown in the statement published by Sir Victor Wilson in that year, were .-£.'170.000. Tho net receipts for the nresent vcar. after paying all ts.xes, will be at least double that amount..

"M> As iho percentage °f taxation to film rentals is approximately the >-amo in an r ' .Vow- JJoaland it w riot considered Jikelv that the Haves organisation, .wliicli controls the American picture industry, vronlii authorise any interference hy the !ocal representatives of tho industry in Tvhat is purely a matter of domestic politic*. Must Bear Store of Taxation. "The renting side of the film industry must recognise in common- with all other businesses that the country is going through a Terr difficult time, and they must bear their share of the necessary taxation. It would seem that instead of claiming to be hardk used they should congratulate themselves on tho fact that owincr to the phenomenal success of the talkintr picture th«v are in receipt of larger revenue in this time of depression than in the most prosperous davs of the silent film. As was explained vhen tho tax imposed it is based on the actual rentals received after deducting; all expenses, and the amount nrion Trhi'-h income tav is payable, and as nearh- as i>oseible is tho eouivale"t of an ad Customs dntv on the film. /he «■<•> per cent, tax on foreign film r.nt hi":h compared, for instance. vi*»i per cent, on apparel and boots.

NO NEW BOOKINGS.

NOTICE TO EXHIBITORS

[THE PBESS Special Serrice.]

WELLINGTON, September 4.

Events in the film industry moved to a climax to-day when following a communication with the United States the various film exchanges and producers' representatives in Wellington refused bookings for new films and informed some exhibitors that contracts expiring would not be renewed. This move follows the unsuccessful attempt of the distributors of film to induce the Government to reduce the total of the extra taxation ou gross profits imposed upon the industry by the Taxing Act of last month. The film exchanges represent; that they are now unable to bear further taxation to the extent imposed by the Government, though they apparently are willing to meet the Minister for Finance to the point of guaranteeing the sum for which lie budgeted. The extra taxation of 25 per. cent, upon gross profits was estimated to produce £.30,000 between July Ist and the end of the financial year, March 31st. It is understood that the film exchanges were willing to pay this sum, provided that it was 6et down as a maximum, but that the Government refused to agree to this. The decision taken by the principals of the New Zealand distributors- was known in Wellington yesterday, with the result that to-day theatre owners were notified that supplies would shortly cease. In addition to the tax of 25 pctr cent, upon gross profits the distributors pay income tax calculated upon 12J per cent, of their turnover, and a Customs tax upon film imported to New Zealand of Id per foot. The chief grievance of the distributors is stated to lie that apart from the new levy the Government has not made them allowance for proper working costs which they claim have become very heavy siifco the advent of the talkies. The present move seems to have originated in Australia, for six of the twelve distributing companies are Australian, trading with Australian capital and purchasing their supplies of film outright under long-term contracts with the American film companies.