The South African film industry contributes around R3.5 billion to the economy every year, however the state of the filming and television industry remains precarious with issues such as escalating production costs and lack of funding posing a threat to the entire industry.
In a bid to support the local film productions, government has, through the National Film and Video Foundation (NFVF), the Industrial Development Corporation and the Department of Trade and Industry (DTI), introduced various incentives to local film productions with hopes of sustaining the industry.
“Local productions have improved over the last few years as increased assistance from government and co-production treaties with various countries benefit the industry”
The aims of film and TV production incentives
The DTI’s film and TV production incentives seek to boost the film industry’s potential in stimulating economic growth, job creation and its role in facilitating dialogue for nation building.
Incentives are also aimed at attracting international production houses to shoot locally and conduct post-production activities in South Africa. The incentives have been in effect from 2004, and a total of 197 productions had been benefited by 2008. The incentives were later revised in 2012 to run until the end of 2014.
According to the NFVF’s study, local productions have improved over the last few years as increased assistance from government and co-production treaties with various countries benefit the industry.
We unpack these film incentives aimed at helping develop the creative arts industry.
What are film production incentives?
Government offers a package of incentives separated into three categories to promote film production and post-production industry. The film commissions are mainly in Gauteng, Cape Town, Durban and the Eastern Cape.
The South African Emerging Black Filmmakers Incentive aims to assist local emerging black filmmakers, to nurture and empower them to take on big productions and thus contribute towards the creation of employment.
The South African Film and Television Production and Co-Production incentive assists local film producers in the production of local content.
The Foreign Film and Television Production and Post-Production incentive seeks to attract foreign-based film productions to shoot on locations in South Africa and conduct post-production activities. Co-productions with international companies result in the direct investment of millions of rands into the economy.
1. The South African Emerging Black Filmmakers Incentive
The South African Emerging Black Filmmakers Incentive is aimed at providing capacity and nurture emerging black filmmakers to take up big productions.
This incintive is available to South African black-owned qualifying productions.
How much is it worth?
There is a rebate of up to 50% for the first R6 million spent from the Qualifying South African Production Expenditure (QSAPE) and 25% thereafter.
This means that there is a 50% tax reduction on production expenditure for the first R6 million. No cap is applicable for this rebate.
“Through the incentive, government hopes to contribute towards employment creation, enhancement of international profile, and increase the country’s creative and technical skills base”
2. The SA Film and TV Production Co-production incentive
This incentive is aimed to support the local film industry and to contribute towards employment opportunities in South Africa.
It is available only to qualifying South African productions with a total production budget of R2.5 million and above.
Qualifying projects include feature films, tele-movies, television drama series, documentaries and animation. And only one film production, television drama or documentary series per entity is eligible for the incentive.
How much is it worth?
This incentive for local moviemakers offers a 35% rebate for the first R6-million spent, and 25% for the remainder of production expenditure.
Eligible enterprises for South African Emerging Black Filmmakers Incentive and SA Film and TV Production Co-production incentive
South African black-owned qualifying productions must have a total production budget of R1 million and above. They must have been in existence, operational and involved in the film industry for at least six months, with at least a 10-minute trailblazer or short film produced.
An applicant must be a registered Special Purpose Corporate Vehicle (SPCV) incorporated in the Republic of South Africa solely for the purpose of the production of the film or television project. An SPCV is an is a subsidiary company with an asset and liability structure, and legal status that makes its obligations secure even if the parent company goes bankrupt.
The holding/service company(ies) must comply with the requirements for B-BBEE’s Codes of Good Practice (at least a level three B-BBEE contribution status) by having at least 65% South African black shareholders, and the SPCV at least 75% South African black shareholders, of which the majority must play an active role in the production and be credited in that role.
Only one film production, television drama or documentary series per entity per application is eligible for the incentive.
3. Foreign Film and Television Production and Post-Production Incentive
This incentive is a little different from the first two in that it works with foreign-owned production companies.
It is aimed at attracting large-budget foreign films and television productions, as well as post-production work. Through the incentive, government hopes to contribute towards employment creation, enhancement of international profile, and increase the country’s creative and technical skills base.
Foreign-owned production companies benefit from this incentive when they film in a local location.
Who qualifies?Foreign-owned qualifying productions and South African qualifying post-production work of R12 million and above, provided that at least 50% of the principal photography schedule is filmed in South Africa, for a minimum of four weeks.
How much is it worth
There is a 20% tax reduction on production expenditure for foreign productions filmed in South Africa with a budget of R12-million or above.
The incentives amount increase incrementally as more post-production is done locally for specified weeks.
Each incentives programme has its own application procedure.