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Thursday, 27.01.2011
Director Mikhalkov loses his windfall
Moscow. A tax on computer equipment and storage media is being introduced, but it's initiator Nikita Mikhailkov looks to go away empty handed. A court in Moscow withdrew the licence to collect the tax from his company of copyright holders.
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Since October it was known that Russia will levy a duty of one percent on technical equipment (computers, TVs, mobile phones, DVD players) and storage media (CD, DVD, memory cards). Importers as well as producers will have to pay the tax. It is still unclear who will be the beneficiary of the money raised.
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After a tender the Ministry of Culture initially awarded the licence to the 'Russian Society of Copyright holders' (RSP). The RSP was founded in 2009 by the Russian Society of Authors and the Society of Film directors, chaired by Nikita Mihailkov. The tycoon of the Russian film industry (an Oscar for 'the sun that deceived us) who close ties to the Kremlin had been lobbying for such a tax for years.
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$100 million revenue per year
This was not done without self interest, as the Russian Society of Authors had calculated on a windfall of $100 million (ˆ73.5 million) per year. Only a tiny sum would actually be paid to the copy right holders. More than half (approx. 60 percent) are supposed to benefit a special fund, as per Mikhailov to benefit the domestic film industry.
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But the Moscow arbitration court decided to withhold the windfall from Mikhailov (at least for now). The court upheld an appeal by the Russian Society for cross rights' ROSP to cancel the tender.
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New Tender necessary
The ROSP, the only other and inferior, competitor in the late summer tender complained that the Ministry of Culture had opened the bidding for the tender, before the government had even passed the relevant law, and thus laid down the conditions unlawfully.
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Therefore a new bid for the tender to hold the licence as tax collector for electronic devices will have to take place.
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As the court 's ruling only critisized a procedural formality it is possible for Mikhailov's Society to bid for a second time. With connections in high places his chances to win are very good.
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