Russian Government Rejects Bill on Tighter Control Over Film Cash

It also refused to reinstate value-added tax on tickets to foreign films.

MOSCOW -- The Russian government has rejected a bill aimed at stepping up state control over funding for the film industry and an initiative aimed at reinstating VAT on tickets to foreign films.

The bill on amendments to the state law on the film industry stipulated introducing tighter control of state cash earmarked for the sector by launching a state commission on the cinema industry. The new agency would determine the “correspondence with genre, historic facts, moral, ethical and cultural aspects” of film projects applying for government support. The commission would also have a final say on provision of funding to film projects.

However, the government said that the existing agencies in charge of film industry funding, such as the culture ministry and the cinema fund, already have sufficient instruments for control over disbursing state cash, and the new agency’s responsibilities would overlap with those of the existing institutions. In addition, the creation of the new agency would require substantial financial resources.

“The government of the Russian Federation believes that the bill is not sufficiently justified,” reads the verdict on the government’s official website.

In a separate decision, the government said it would not reinstate VAT on sales of tickets to foreign films as such a move would contradict policies of the World Trade Organization, which Russia joined a year ago. VAT on ticket sales was scrapped in the 1990s in a bid to support the then fledgling exhibition industry. But six months ago, a proposal came that the VAT privilege should apply only to tickets to local films in a bid to increase Russian films’ share of the total box office.

The local film community welcomed the decision on VAT. “Representatives of the Russian film industry unanimously spoke in favor of supporting national cinema not by means of quotas and depriving viewers of the VAT privilege on tickets, but by comprehensive development of theaters and an integral approach to promotion Russian films,” Kinoalyans, the Russian cinema industry’s lobbying group, said in a statement.