HIRE OF FILMS

Evening Post, Volume CX, Issue 43, 19 August 1930, Page 11

HIRE OF FILMS

THE NEW TAX

LAST YEAR'S REVENUE

Some interesting facts in regard to the revenue from the film hire tax were recited by the Prime Minister (the Hon. G. W. Forbos) in the House of Representatives early this morning, in replying to a suggestion by the Leader of the Opposition that the revenue required from films might be obtained by increasing the present Customs footage duty instead of by altering the basis of taxation to that of exhibition, value, as is proposed. Mr. Forbes also1 replied to a suggestion that the proposed tax is so unduly severe that it will cause firms to go out of business. Mr. Forbes declared that the idea of increasing the present Customs footage duty w*3 impracticable, for two reasons. In the first place, the footage imported last year was considerably less than in previous years. Despite the fact that the gross rentals obtained from the theatre proprietors increased by nearly 100 per cent., the Government receipts from the Customs footage tax fell from £37,250 to £26,808. The indications were that less footage was required in- the. case of sound films as compared with silent films. The removals of films from bond in the early part of the year—presumably in anticipation of increased duty, said Mr. Forbes, were so heavy that in order to obtain the necessary revenue during the balance of the year it would have been necessary to increase the footage duty to such an extent that it would have reacted to the serious disadvantage of the New Zealand theatre proprietors. EFFECT OF PROPOSALS.

As to the suggestion that the proposed tax. is unduly severe, and that it would cause firms to go out of business, Mr. Forbes said that when the Cinematograph Films Act, 1928, was under consideration the distributors (renters) submitted a printed statement setting out their position. It showed that the Customs taxation for the previous year amounted to £37,250, and the gross amount received in film rentals for the same period was £284,000. It was stated that 40 per cent, of the gross film rentals was expended in New Zealand, leaving 60 per cent, as net receipts. The Customs taxation for 1927, therefore, represented 22 per cent, of the net receipts. The taxation now proposed, estimated as percentage of net receipts, was: Customs footage tax, 10 per cent, and film hire tax, 25 perj cent.; or a total of 35 per cent. The proposals, therefore, represented an increase of 13 per cent, on the 1927 taxation. : Referring to British films, Mr. Forbes said they had been relieved of the 2 per cent, primage duty, and now only paid the 10 per cent, film hire tax, as compared with the dual taxes on foreign films estimated to be equivalent to an ad valorem taxation of 35 per cent.