THE FILM TAX.

Press, Volume LXVI, Issue 20037, 19 September 1930, Page 16

THE FILM TAX.

FOREIGN INTERFERENCE. STATEMENT BY MR RANSOM. [THE PEESS Special Service] WELLINGTON, September 18. Interference on the part of any foreign corporation in the domestic affairs of the Dominion will not be tolerated by the Government. This was made clear by the Acting-Prime Minister, the Hon. E. A. Eansom, in an outspoken statement he issued to-day in reply to published remarks concerning the film hire tax recently imposed by Parliament and the effect of that tax on the moving picture industry. "My attention has been drawn," said Mr Ransom, "to misleading statements in the Press concerning, the film hire tax and its effect on the industry, and also references to a boycott of New Zealand by American film organisations. Objections appear to be raised principally on the ground that the new tax will bring in more than was estimated by the Government. On this point 1 have to say that the revenue to be derived from the tax during v the balance of the financial year is, after all, only an estimate in which there is no doubt room for differences of opinion, but if the tax does bring iu more than is anticipated by the Government it can only mean that the net rentals, after deducting administrative expenses and the amount on which income tax is payable, are greater than was estimated. In fact, if tho rentals are greater it simply means that the surplus remaining for the film companies is greater than if the yield from the tax was less, thus the renters should be the last to complain of tho tax producing more than is estimated. The rate of tax is definitely fixed at 25 per cent, in the ease of American sound films and it is only payable on the actual net rentals received, whether the amount be large or small. Nature of Tax. "From a budgeting point of view it is inevitable that some items will produce more and some less than the Estimates, and if the Government were to consider makingV reductions, in items that showed indications of producing more there would bo little hope of balancing tho Budget as a whole. As has previously been explained, tin* film hire tax is as near as possible the equivalent of an ad valorem Customs duty on sound film having regard to the fact that the real value of a film is the amount of rental it will produce on being exhibited. Some films earn large amounts and some very little. Under theso circumstances to have increased the flat rate footage tax by 2d or 3d per foot to obtain the additional revenue would obviously be quite inequitable, and in view of the largo clearances from bond prior to the tariff changes would have been largely ineffective from a revenue point of view this year on an ad valorem basis. The 25 per cent, tax has been referred to in tho Press by representatives of the trade as confiscatory and such as to render trading in New Zealand quite impossible. As to this I need only say that a perusal of the tariff will. show that many articles pay higher ad valorem rates. On apparel and boots, for instance, the rate ia 47 per cent.

Alleged Lock-out. • "It has been stated by- the trade that the threatened refusal by the American film distributors to supply films to New Zealand is a 'lock-out! by the Government and not a 'boycott' by the distributors. In this connexion the following points have already been made by the Minister for Internal Affairs in reply to a recent deputation on the matter: ' • (1) "That, the tax in New Zealand bore approximately the same proportion to rentals received by the distributors as did the Australian taxation. (2) "That the New Zealand exhibitors were paying a larger proportion of the total rentals than in previous years. (3) "That the increased amount paid by the New Zealand exhibitors would be more than sufficient to pay the film hire tax. (4) "That the net receipts for the present year from film hires after paying the tax would be double the net receipts • collected in the silent film days. ~ • "The film distributors have thereforo to explain why the tax in New Zealand is confiscatory and causes a 'lockout' while the taxation in Australia involving the same., percentage of gross rentals can be accepted .with more or less equanimity; "May I also point out that the British film producers who" share the principle Involved in the tax have raised no such questions as 'lock-outs' and 'boycotts' but on the contrary have assured the Government of their determination to carry on with a-hope that when times are better the Government will agree to review the matter. '

Interference Not to De Tolerated. "Finally my attention has been drawn to a published statement as-follows: 'The distributors' action is not a bluff. Having withdrawn .under, Mr Hayes' instructions' they must stay but until Mr Hayes gives them permission to recommence business.' "In this connexion let me say the industry must clearly understand that the Government will- not tolerate interference in the domestic- affairs of the Dominion on the part of-any foreign corporations." DISTRIBUTORS' ATTITUDE. (press association telegkam.) ■WELLINGTON, September 18. Interviewed this morning, Sir Victor Wilson, president, of the Film Distributors' Association, said that it was quite correct that be had received a letter from the acting-Prime Minister (Hon. B. A. Ransom), stating that the Government was not prepared to reopen its investigation or have an enquiry into the position. He hoped to make a complete statement of the whole case within the next day or so, as he believed that not only the trade but the public was entitled to know the whole circumstances of the present "lock-out" in the film industry.