Ukraine Won't Tax Hollywood and Foreign Films

Ukraine Crisis bicycle cinema H
Stuart Farmer

Proceeds from foreign sales and lotteries will be used to fund national film production instead.

Ukraine won't introduce an exhibition tax on Hollywood and other foreign films, proceeds from which would be used to fund national film production.

The idea was seriously considered earlier this year as a measure to support the cash-strapped local film industry, but it caused substantial criticism, and authorities eventually decided not to go ahead with it.

Instead, proceeds from lotteries as well as foreign investment are to be used to fund local film production, according to the new draft law "On state support for film production in Ukraine," presented by the country's culture ministry and the state agency for cinema.

"The draft law aims to stimulate the development of the industry and attraction of investment, including foreign investment," Filipp Ilyenko, head of the state cinema agency, was quoted as saying by the Ukrainian news magazine

According to Ilyenko, a new fund for financing local film production is to be set up, to which 0.1 percent of the state budget will be automatically allocated, as well as proceeds from foreign sales of Ukrainian films and a national lottery.

Ukraine's film industry found itself in a tough spot last year, when the country entered a period of economic turmoil following the annexation of Crimea by Russia and armed clashes with pro-Russian separatists in East Ukraine. Ukrainian filmmakers have complained they've been unable to collect previously allocated funding and, especially, cash for new projects.