DUTY ON FILMS

Dominion, Volume 23, Issue 256, 25 July 1930, Page 12

DUTY ON FILMS

An Ad Valorem Tax METHOD EXPLAINED “In connection with the amount of additional revenue which it was deemed advisable to obtain from indirect taxation,” said Mr. Forbes, “I may say that in preference to other things it was considered that additional duty should be placed upon kinematograph sound films. As the value of films varies a great deal, to be equitable any increased taxation should be upon an ad valorem and not a footage basis. \ “The difficulty * here, however, is that the value of a film is not known when it comes over the wharf. In this connection it may be explained that films are not sold, but are rented to the theatre proprietors, usually for a percentage of the gross theatre takings. Further, films are not dealt with singly, but in groups or ‘blocks.’ Under these circumstances an ad valorem Customs duty in the ordinary way is hardly practicable, but it is proposed to impose the equivalent of an ad valorem duty in the shape of a filmhire tax.

“Briefly, the proposal is that the filmdistributing firms will be required to make returns monthly to the Commissioner of Taxes of the gross rentals received from sound films and the administration expenses incurred in New Zealand, commencing as from July 1 last. After deducting these expenses, nnd also the percentage of gross rentals upon which income-tax is levied, the residue will represent the value of the films, on which will be levied an nd valorem tax at the rate of 10 per cent, in the case of British films and 25 per cent, in the case of foreign films.”