Brazil's Senate approved yesterday a more palatable version of new rules imposing taxes on foreign pay TV programmers, following a congressional nod last week. However, the original proposed regulations on new taxes and fees on film studios remain unchanged.

Studios face an 11 percent tax on remittances and increased fees on film imports. TV programmers will have to pay a three per cent tax instead of the proposed 11% on cash remittances to their bases abroad. New fees on imported films, series, documentaries and commercials were scrapped after vigorous lobbying from US programmers and studios.

Several MPA members have filed complaints against the 11% tax. In late March, Warner Bros won an injunction to suspend payments to Condecine, the film fund the government set up by executive order last September. Asked if these new taxes and fees will force studios to cut down their number of releases in Brazil, MPA Latin America senior vice president Steve Solot said it would not.

According to the proposed draft, programmers are obliged to deposit the three per cent tax in a bank account and use the fund to locally produce films, series and other types of programming within a 270-day deadline. If they miss the deadline, the money is transferred to a fund of Ancine, the newly created government agency that oversees the country's film industry.

The new rules have been passed on to Brazil's president for approval. According to Ancine director Gustavo Dahl, the three percent tax on remittances will be effective as soon as the president approves the new regulations. Ancine is currently devising a system to monitor payment of the new taxes, said Dahl.