South Africa plans to offer about $41m (R252m) in taxincentives to local and foreign film companies over the next three years topromote the country as a prime filming location, Trade and Industry MinisterMandisi Mpahlwa said this week.

Companies would have to spend at least $4m (R25m) inproduction costs to qualify for a rebate of a maximum $1.6m (R10m).

International companies producing films in South Africawould be awarded a 15% rebate of their total expenditure, while local companieswould be given 25% of their costs.

To qualify at least 50% of principal photography has to takeplace in South Africa, over a minimum period of four weeks.

The tax breaks will add to the cost savings film companiescan make in South Africa because of the level of the Rand. It is estimated thatfilm production is already 30 - 45% cheaper in South Africa than in the UK andup to 40% lower than in the US.

The announcement was made on Wednesday in the Gautengregion, home to over three quarter's of South Africa's film industry,including the nation's main broadcasters, infrastructure, banks and otherfunding sources in cities including Johannesburg and Pretoria.

Commenting on the announcement, Themba Sibeko, CEO of theGauteng Film Office said, "This tax incentive is a move forward in SouthAfrica's bid to compete as a producer of local and international featurefilms and episodic television. It also means our producers can seek moreco-productions with other countries. The tax incentive demonstrates thegovernment's commitment to strengthening our flourishing filmindustry."

Salma Hayek and Colin Farrell are currently in South Africafor the Cruise/ Wagner production, Ask the Dust.

Other major films that have been produced in South Africainclude Hotel Rwanda, The Gods Must be Crazy, Cry, The Beloved Country, ThePiano Player and Sarafina.

A panel comprising officials from the finance ministry andthe government's National Film and Video Foundation will decide whoreceives the tax breaks, Film makers will also qualify if they shoot featurefilms, telemovies, television drama series or mini series and documentaries.