Ukraine’s Government to Introduce Tax on Film Exhibition

The cash collected will go toward financing the local movie industry.

MOSCOW -- Ukraine’s government says it's preparing to introduce a tax on film exhibition in a bid to collect extra funds for the local film industry.

A five percent tax is to be slapped on revenues of all film exhibitors and distributors. Under the new rule, telecom operators are also to be subjected to the tax, but for them, it will be two percent of their revenues.

The Ukrainian government expects the tax to bring in 100 million hryvnas ($12.5 million) a year, an amount comparable to what is currently spent to fund the national film industry. In 2013, Ukrainian filmmakers are scheduled to collect $17.5 million in state cash, and local film officials said that amount is tied to the industry’s needs and could be increased, if necessary.

Meanwhile, telecom operators are unhappy about the idea as not all of them are involved in film exhibition and distribution, but the new regulation doesn’t differentiate, so that all telecom companies must pay the two percent tax.

“This is just another tax because not all telecom companies have anything to do with film distribution,” Vadim Sidorenko, head of the major Ukrainian internet provider Triolan, was quoted as saying by the Ukrainian website

He added that the telecom operators alone would pay about one billion hryvnas ($125 million) a year if the tax is imposed on them, a much higher amount than the Ukrainian government expects. But, according to Sidorenko, the operators would pass the extra cost onto the user, raising prices for their services.