Exhibitors oppose movie ticket tax

South Korean government passes bill to fund local cinema

By DARCY PAQUET

SEOUL -- Lawmakers in South Korea have passed a bill authorizing the Ministry of Culture & Tourism to impose a 3%-5% tax on movie tickets, in order to create a $430 million fund to support local cinema.

The tax, which will amount to between 25¢ and 43¢ per ticket, is set to go into effect on July 1 and last through Dec. 31, 2014. It's expected to raise a total of $215 million over seven years.

The measure has provoked objections from many in the local film industry, who fear raised ticket prices will discourage theater attendance at a time when a production glut and declining international sales have squeezed profits.

The Seoul Theater Assn. has floated the idea of a lawsuit, pointing to a similar longstanding tax on ticket prices that was declared unconstitutional by the nation's top court and abolished in 2005. The ministry insists it will structure the new tax so as to avoid any problems with the court.

The tax was included in a set of measures announced by the ministry to counteract the effects of a reduction in Korea's Screen Quota System, which was halved to 73 days effective July 1, 2006. Nonetheless, a group representing the film industry publicly rejected the plan in November, calling for alternative measures and a reinstatement of the quota at its original level.

Observers also question the need for such a large infusion of financial support. In addition to the proposed $430 million fund (with the remaining $215 million to be taken from the national budget), an existing $108 million fund already is being used to finance a variety of support programs.

It's not yet clear how the new $430 million fund is to be spent, particularly given the current opposition of the film industry.