Russian Government Mulls Lifting 15% Import Tax on Digital Cinema Projection Equipment

In a bid to speed up a complete switch to digital projection, the Russian government has suggested that a 15 percent import duty on digital projection equipment for theaters should be lifted.

The idea was first raised by the film theater association Kinoalyans, which includes the country's biggest theater chains Karo Film, Kinomax and others. Earlier this week, the government's subcommission on customs and tariffs supported Kinoalyans' proposal, under which the duty should be lifted as of April 1 for a five-year period.

However, since Russia is part of the customs union, which also includes Belarus and Kazakhstan, the proposal could only be enacted if adopted by all the three member countries. The union's next meeting, scheduled for April 7, is expected to consider the issue.

Meanwhile, the proposal is likely to be much less important for Belarus and Kazakhstan, as those countries' film theater industries are considerably less developed than that of Russia.

"If the proposal is adopted, it will have a positive impact on the Russian film theater market," Leonid Ogorodnikov, chairman of the board of Karo, told The Hollywood Reporter. "That will create opportunities for equipping theaters with digital projection equipment quicker than the current business strategies stipulate. Also, that will allow us to enter smaller cities, as currently theater chains are primarily targeting cities with a population of at least 500,000 people. The number of screens available in Russia is several times smaller than what we actually need."