Sunday, December 24, 2006

UK to Lose Indian Producers to South Africa

As United Kingdom Government is planning to introduce new rules of cinema tax breaks, it is also predicted that the number of Indian film will be lessen in the coming year and most of them will be shifted to South Africa. The new rule involves an increasing number of taxes to be paid to government. A film producer is to spend 20% of the movie’s total budget as tax whereas the new rule will cost 25% of the total budget of movie. I have gone through a The Hindu article regarding this matter and now am quoting some lines from that article:

The company worked on 15 Indian films in the UK this year. Seven of its shoots were with a single producer, Sudhakar Bokade, who is relocating to South Africa next year.

Indian film makers are attracted by the famous landmarks and scenery. But they also come for the tax breaks, which until now applied to productions that spend more than 20 per cent of their budget in the UK.

From January 1, any production wanting to qualify for tax relief must spend at least 25 per cent of the budget in the UK and pass a "cultural test" for Britishness, earning a minimum, of 16 out of 31 points for criteria such as hiring British actors and crew and using the English language.

According to UK Film Productions founder David Choudhry: "If these productions stop coming to the UK we may have to shut down. We expect to do half as many films next year."

The company provides scouting, catering and extras for Bollywood productions looking to film in England.

The UK Film Council is negotiating co-production treaties with several countries, including India, Jamaica, China and Morocco where foreign products would not have to pass a cultural test to qualify for tax relief.

The Government estimates that it has been subsidising the UK film industry to the tune of between 300 million pounds and 500 million pounds a year. Under the new rules, the subsidy will drop to between 120 million pounds and 150 million pounds a year, but with between 16 per cent and 20 per cent of tax relief handed to producers.

Crucially, from next year tax relief can no longer be claimed by companies set up by sale and leaseback partnerships. The subsidy will instead be paid to the company responsible for the principal photography, post-production and completion of the film.

The Indian producers may find some suitable places in South Africa or any other states for shooting purpose. However, it will be a problem for UK government to find any other country or film industry as in terms of quality and popularity Bollywood deserves the place just after Hollywood. I think UK government will take a decision over this matter consider the pragmatic and situation and the effect of the decision.