A new tax proposed by the Pakistan government could hit the import of films and television serials produced in India and increase the prices of tickets at cinema halls across the country.
While unveiling the budget for 2013-14 in parliament, finance minister Ishaq Dar proposed an “adjustable withholding tax” to be levied on all foreign films and television serials.
The tax on a foreign-produced film will be Rs 1 million while the tax for a foreign-produced television drama serial will be Rs 100,000 per episode.
In the case of foreign-produced television plays too, the tax will be Rs 100,000, Dar said.
“The new adjustable withholding tax is being proposed for foreign-based films and dramas to make them competitive with the local film industry,” he announced during his budget speech.
Pakistan imports dozens of Bollywood and Hollywood films every year.
A ban imposed on the import of Indian films after the 1965 war was partially eased during former military ruler Pervez Musharraf’s regime. The restrictions were further eased under the previous Pakistan Peoples Party-led government.
Film distributors have credited the import of Bollywood films, which are popular with people across Pakistan, for the revival of cinema-going culture in the country. Several multiplexes in cities like Karachi and Rawalpindi screen only Bollywood productions. The new tax is adjustable, meaning importers or cinema hall owners can claim refunds while filing annual returns.
Officials said the tax was proposed to keep track of imported films and serials and discourage the reckless import of movies.
However, the new tax could lead to an increase in prices of tickets at cinema halls and multiplexes.
Analysts said the new tax could also hit the import of foreign serials aired on Pakistani channels and cable networks.