Sri Lanka slaps tax on H'wood, B'wood programming

Given the popularity of subtitled programmes made in Bollywood, the Srilankan Government has come up with the taxation policy.

Sri Lanka's government has begun imposing taxes on television stations broadcasting foreign movies, sitcoms and dramas in a bid to boost its own fledgling industry, the finance ministry said.

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An existing media tax will be extended to commercials made abroad for local companies which have been outsourcing some of their promotional work to Indian advertising firms.

Foreign commercials aired on television stations will now be taxed a sizeable one million rupees (10,000 dollars) while movies, sitcoms and teledrama will be taxed at 75,000 rupees for every 30 minutes.

Teledramas and films imported and dubbed in native Sinhalese or Tamil languages will be taxed even more at 90,000 rupees for each 30 minute segment, the finance ministry said.

The taxes will be effective from the beginning of July, it said.

President Mahinda Rajapakse, who is also the country's finance minister, had warned of the imposition of the tax in his budget proposals for 2006. The money, he said, would be channelled to develop the local film industry.

"This is not a revenue generation method, but a policy directive to ensure the development of the (local) arts," treasury secretary PB Jayasundara said in defending the new entertainment tax.

Programmes with Tamil language content is exempt from the tax as Sri Lanka produces very little Tamil programming, Jayasundara said.

Asoka Serasinghe, the chairman of the National Film Corporation, said around 57 films are aired on television each week, of which nearly 50 are in foreign languages.

By contrast, Serasinghe said nearly 300 locally produced dramas are gathering dust on the shelves due to lack of airtime and sponsors on television channels.

Jayasundara said the tax would not apply to documentaries, educational dramas, movies screened in theatres and children's entertainment.

Industry watchers say local television stations air more than 1,500 movies, mainly English, Tamil and Hindu, each year.

English content on local stations is limited to about four movies, four dramas, music programmes, adventure series, cartoons and a few sitcoms per week.

Though native Hindi speakers are virtually non-existent in Sri Lanka, subtitled programmes made in Bollywood, India's prolific Hindi-language film industry, are hugely popular on local television and easily attract sponsors -- unlike local productions which hardly draw any viewers.