The recent changes made to South Africa’s tax incentive scheme, along with other proposed regulations, may cause the country’s film industry to become stunted. This comes after the Motion Picture Association of America (MPAA) raised concerns about these regulatory changes.
International publication Variety states the new guidelines stipulate that productions failing to meet specific benchmarks for supporting black-owned businesses may not receive cash rebates.
The prospect of these rebates will also not be determined until the production has wrapped in South Africa.
Speaking to Variety, MPAA spokesperson Marianne Grant says that the new tax laws have put a strain on budget production as it is planned strictly before any filming begins.
The South African Department of Trade and Industry (DTI) stated that from 1 September 2018, 20% of an international production’s budget must be spent on black-owned companies. Although this means that an international production that does not stick to this guideline will not be rebated, the DTI has not yet clarified how this is calculated.
“Film and television production is a high-risk business, and to manage this risk, we need a tax system with stable incentives to create sustainable jobs across all strata, and a copyright system that protects the sector, its creators and their work,” Grant said. “The MPA has sought to work collaboratively to propose alternative measures which would achieve the same objectives without the current levels of risk.”
Grant added, however, that the DTI’s efforts of transformation are being praised. She also said that members of the MPPA have their own role to play in supporting South Africa’s economy.
“We share the same objectives as the government and we believe that regulations can be introduced in a practical way and according to a realistic timetable, and with robust public consultation where that is still needed,” she said.