Foreign pay-TV programmers may have won a temporary victory over the implementation of harsh taxes in Brazil, but in Mexico the battle is just heating up. The bone of contention is a Congressional move to impose a new 10% tax on satellite and cable TV services in the country.
Last week, affiliates for Sky Latin America, DirecTV, local cable company MVS Multivision, the National Chamber for the Cable Television Industry and the Chamber of the Radio and Television Industry announced their intentions in local newspaper ads to "overturn the (tax) using every legal means available." They warned that the fiscal reforms would force them to increase rates. Indeed, some Mexican MSOs like Megacable have proceeded to raise their prices. Another MSO, Telecable, has plans to follow suit.
"We are analysing the possibilities of filing an appeal," said DirecTV Mexico spokesperson Marigela Zamudia. Other satellite and cable TV companies are also mulling over their individual appeals. The tax package passed on Jan 1 included a new 10% levy on some telephone and data services, prompting leading Mexican cellular telephone firm Telcel, a unit of America Movil, and smaller wireless phone company Unefon, to seek to overturn the tax through lawsuits.
In Brazil, the move to make pay-TV programmers pay $800 per feature film and $180 per TV episode has been postponed amidst strong protests from the sector and from the Motion Picture Association. The 'Codecine' tax package also called for an 11% tax on remittances from theatrical and home video subsidiary operations to foreign bases. Film distributors would have to shell out some $1,200 per film per window, double the current fee of $600.
However, the reprieve is said to be mainly caused by delays in the launch of the newly-created National Cinema Agency (Ancine) which will collect the taxes and fees as well as regulate the film industry.