Producers blame state for losing out on billions

SA’s film industry is at a pivotal juncture as government reforms have shrunk tax breaks for foreign-funded projects.

It is feared the contentious policy changes will stifle growth in the sector and lead to losses of billions in potential investment.

The industry, which once thrived on international collaborations, faces a downturn as professionals seek greener pastures. The revised foreign film tax rebate offers 20% on qualifying expenditure with an additional 5% for postproduction services provided by blackowned companies, capped at R25m, down from R50m.

“As a result of the actions of the department of trade, industry & competition (DTIC) officials, the SA audiovisual industry is in a state of deindustrialisation as both producers and crew find other work, careers or countries to work in,” said the Independent Producers Organisation (IPO).

“A country in desperate need of job creation is, in fact, forcing producer members out of the industry and thereby putting an end to their businesses that create jobs through [the] DTIC.”

International production companies invest more than R10bn annually in SA. According to the SA Cultural Observatory, in 2020 creative industries contributed R63bn to SA’s economy. These industries now contribute an estimated R90bn, with most coming from audiovisual.

The department of trade, competition & industry, led by Ebrahim Patel, said when asked about the change in policy: “The government has engaged with industry players internationally and locally about the need for additional private sector support to promote the industry’s sustainability, given the fiscal constraints the country was and currently is experiencing.

“Based on these fiscal constraints, the film and television incentive programme had to be scaled back,” it said.

The consequence is that SA is losing its competitive edge in the global film investment market as the likes of Ireland and Greece offer more lucrative incentives, ranging from 32% and 40%.

A gripe for producers is that the department does not fully engage with the IPO, Animation SA, the Independent Black Filmmakers Collective, the SA Screen Foundation and others.