Following the announcement of its revision of the existing Large Budget Film and Television Production Rebate launched in 2004, South Africa’s Department of Trade & Industry (DTI) held a workshop on 5 February in Tshwane to introduce industry stakeholders to the revised rebate and to the DTI’s new incentive scheme targeted at local productions. Both schemes came into effect as of 1 February.
Judging from feedback from the large industry turnout at the workshop, it was clear that the two rebates have been enthusiastically received. Present were representatives from the Independent Producers Organisation (IPO), The Producers Alliance (TPA), South African Screen Federation (SASFED), South African Script Writers Union (SASWU), FEPACI (Pan African Federation of Filmmakers), the Durban Film Office (DFO), Ster-Kinekor Distribution and Film Finances, as well as several independent producers.
The National Film and Video Foundation (NFVF), public broadcaster SABC and the Department of Arts and Culture (DAC) were also represented at the workshop.
As per Godfrey Mashamba, Director Product Development – The Enterprise Organisation, the DTI division responsible for formulating incentives and codes of practice, the DTI has been working with key stakeholders in the industry ever since it launched the Large Budget Film and Television Production Rebate in 2004. “We’ve consulted at length with the industry on how the Large Budget rebate should be improved and at last we have finality. With the revised rebate and the new scheme for local production, we’re looking forward to achieving the goals of ASGISA.
“By September 2007, 41 productions with a total Qualifying South African Production Expenditure (QSAPE) of R2m had applied for the Large Budget rebate. The actual number of productions completed under that rebate to date is 22, with R155m paid out.’
Moeketsi Marumo, Deputy Director of The Enterprise Organisation, DTI, pointed out the key differences between the Large Budget rebate and the revised version, as well as the new rebate for local production. “We’ve issued two separate sets of guidelines – the Location Film and Television Production Incentive [ie. foreign-owned productions shooting in South Africa] and the South African Film and Television Production and Co-production Incentive. The latter is specifically designed to encourage local production and official treaty co-production and the QSAE threshold is R2.4m, where applicants will receive a rebate of up to 35%, capped at R10m. For foreign productions, the QSAPE is R12m and an eligible applicant with be rebated a sum totalling 15% of the QSAPE with the rebate capped at R10m.’
The DTI is in the process of doing away with the Provisional Certificate as used in the original Large Production rebate. Now a letter of approval will be issued instead and principal photography must start within six months of the date of the letter of approval.
South African productions need to shoot for at least two weeks in South Africa and foreign productions a minimum of four weeks. To be eligible for QSAPE, the applicant needs to be a South African registered company. While Broad Based Economic Empowerment (BBEE) is a strong incentive for the local production rebate, it does not apply to foreign companies. (Julia Nzimande of the DTI’s Policy & Regulatory division noted that the issue of BBEE will be dealt with in depth in further workshops held later in the year.)
The original Large Production rebate made provision for bundling of productions – that has been removed from the revised version and is not included in the local incentive. “What is needed to qualify for the local incentive is a distribution plan and agreement and a letter of intent from financiers. At least 75% of the total budget of the film is defined as QSAPE. Further, the majority of Intellectual Property must be in the hands of a South African citizen and the director must be a South Africa citizen. Additionally, the top writer and producer credits must be South African. An official co-production must be approved by the Minister of Arts and Culture,’ explained Marumo.
The rebate will be administered by TEO Incentive Administration Unit within the DTI. The existing Film and TV Adjudicating Committee will continue to adjudicate on projects. Mashamba stressed that the rebate will be constantly under review and open to adjustments. “We will continue to consult with the industry.’
At the workshop, questions were raised pertaining to several issues. One of these was the definition of a “documentary’ in relation to “documentary feature’. As per the rebate guidelines, a documentary “must not be less than 90 minutes in length’, a definition that was deemed problematic by the industry stakeholders present. It was pointed out that most local documentaries are 48 minutes in length, to slot into the TV broadcast hour. The DTI team said they would look into the definition.
Animation projects are to be specified separately in the future as they don’t fit into the current rebate guidelines.
The DTI’s Francesca Strauss, who is in charge of the implementation of the rebate, said that there was now increased capacity in the department to speed up processing of applications, etc. She said that government had assigned a budget of R600m for the rebate schemes, for the period 2008 to 2011. Priority would be given to local production, although Strauss could not at this stage say what percentage of the R600m that would comprise.
In closing the workshop Mashamba commented that the DTI was keen to hear how films made under the rebate fared in terms of returns. “We need to know if the industry is improving its product and whether there is truly transformation.’
