Spain's Catalonia Region Explores Taxing High-Speed Internet to Subsidize Films

"Rec 3"

Home to the "REC" franchise, "The Orphanage" and "Vicky Cristina Barcelona," Catalonia has been a cornerstone of the Spanish industry's recent successes but has been hit hard by budget shortfalls.

MADRID – The regional Catalan government in Spain’s northestern territory is toying with the idea of taxing telecoms offering high-speed ADSL Internet connections to subsidize local film production, the region’s culture secretary said this week.

“It would be a production canon like the French one, “Catalan Culture Secretary Ferran Mascarell said in an interview on the regional TV channel TV3. “The prices for this kind of connection right now are fairly expensive. So it doesn’t have to affect the bill.”

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Mascarell declined to give a ballpark figure of what kind of tax could be imposed, saying it was being studied. He added that the government would create a mechanism to avoid passing on the cost to consumers.

The tax, if passed, would not go into effect until 2015, given that debate on the 2014 budget is closed.

The idea of the tax, generally unpopular with consumers, was proposed earlier this summer by the region's film academy in response to exhausted government subsidies and depressed box office revenue.

Redtel, the organization that groups telecoms like Telefonica, Orange, Vodafone and ONO, said it “unanimously and emphatically” rejects the measure, according to a statement.

According to the telecoms, just under 1 percent of overall revenue is already destined to subsidize Spanish pubcaster Radio Television Espanola and another 5 percent goes to support Spanish production.

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Unlike the 5 percent applied already, the Catalan government’s tax would apply only on activity in the region and be destined exclusively for regional film producers.

But Cataloni'a Federation for Audiovisual Producers PROA applauded the idea.

“It would correct an irregularity in the audiovisual market. It’s not normal that one of the biggest consumers of the products in the 21st century and the one that generates the most activity, doesn’t reinvest in the sector via an industry tax,” a spokesperson for PROA said.  

Catalonia is home to some of Spain’s most important film producers, like Rodar y Rodar, Filmax, Versus Ent., Nostromo and Mediapro.