Indonesians clamoring for new Hollywood movies must head overseas

Culture and Tourism Minister Jero Wacik said that taxes would rise, though modestly. “There had been a steep rise, so there was some tumult as importers objected. Even the president had to intervene,” he said, according to the Jakarta Globe.

Still, distributors will face hefty demands for back taxes that could frustrate any quick return to business as usual. Two dominant Indonesian importers of Hollywood films are contesting claims by the US for over $40 million in unpaid taxes between 2008 and 2010, based on the old rules.

Revising the tax duty is only the first step to ending the drought, says Ananda Siregar, CEO of Blitz Megaplex, the second-largest theater operator. The next step is for US studios to begin exporting new movies to Indonesia, but this will be difficult as long as the importers are still battling the taxman.

“I’m afraid moviegoers will be disappointed and waiting in vain if the major studios still insist on exporting through their current distributor. As far as I know, their distributor’s import licenses are still suspended pending full payment of their back taxes,” he wrote in an e-mail.

The upside of the blockbuster movie drought

Indonesian government officials have tried to put a nationalist spin on the tax dispute, arguing that fewer US blockbusters means more opportunities for domestic films. Last year, cinemas showed 77 domestic movies, compared with 192 foreign titles. The number of Indonesian films produced annually has risen in recent years.

One beneficiary of the current Hollywood drought is “Hearts of Freedom,” a big-budget film about Indonesia’s war of independence from Dutch colonialism that premiered on multiple screens last week. But some film producers are skeptical about the government’s claims, pointing to its lack of consistent support for the industry.

“I think if the government is very serious in promoting Indonesian films, it needs to understand the big picture, first of what the market needs,” says Shanty Harmayn, a Jakarta-based producer. She argues that Indonesia needs more screens and sustained investment in film education and other infrastructure in order for producers to meet the demand for higher quality movies.

Eddy says that he enjoys Indonesian films, but doesn’t want to miss out on what the rest of world is watching. This includes "Transformers: Dark of the Moon" and "The Green Lantern," which are on his must-see list for the summer, even if it means leaving town on the weekend. “I want to see it on the big screen with a cool sound system,” he says.

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