The looming cancellation of the Dutch tax incentive scheme (CVs) has been labelled 'disastrous' by the Council For Culture, the Netherland's most important advisory committee on cultural issues.

Last week, proposals for the new state budget were published in the Netherlands and made no allowance for the continuation of the scheme, which has been in place for five years. (, Sept 17)

The Council said an 'inevitable consequence' of the move would be the 'marginalisation of Dutch film, national as well as international'.

The Federation of Filminterests, which represents Dutch film professionals, said the government's decision to 'cut off tax measures denies the conclusions of the Berenschot report'.

In this government commissioned report, management constancy group Berenschot evaluated the effects of five years of the Netherlands' tax incentive scheme (CVs) on film production.

It concluded that the government's main goal of 'creating an economic viable branch of industry' was improbable as well as unrealistic. However, it said that other objectives, such as enlarging the sector's market orientation, doubling its production volume and strengthening its structure, had been largely achieved.

The average production budget for Dutch films has risen from around Euros1m in 1998 to Euros5m (for Cvfilms) in 2000 before dropping back again to Euros2m (for Cvfilms) in 2002. Distributors minimum guarantees have grown from around Euros400.000 in 1999 to a liberal Euros1.1m in 2002.

The Dutch Film Fund is calling for an extension of the tax incentive for two more years, arguing that the promised five years of support have not been in effect for their entire duration due to various changes in the ruling along the way.

Next week, the parliament's finance committee will discuss the government's plans to drop the incentive.