Romania has the potential to become an important European film producer if it puts into practice on a national level state aid schemes for the movie industry similar to those applied in other EU member states in Central and Eastern Europe, PwC Romania study shows.
Currently, the aggregate turnover of the film industry in Romania is of approximately 53 million Euro, out of which 82 percent was generated by foreign films shot in Romania. The sector employs directly 650 to 750 film professionals and pays up to EUR 5 million in taxes to the state budget every year.
Also, the sector has an important multiplication effect in the wider economy, generating revenues of up to EUR 149 million in sectors that are connected to the film industry. As such, the PwC study estimates the total economic impact of the Romanian film industry at approximately EUR 200 million, between 1600 and 1800 workplaces created and up to EUR 22 million worth of taxes paid to the state budget.
“Although Romania benefits from a film infrastructure comparable to that from the developed markets in Europe, (…) the local film industry is faced with a relative stagnation in recent years. The overall costs for film productions in Romania are competitive, but the cost difference to other countries in the region (estimated at 3-5 percent) is not big enough to compensate for the lack of tax incentives that most of the countries in the region offer”, stated Bogdan Belciu, Management Consulting Services, PwC Romania, one of the authors of the study.
“According to our estimates, the foreign film productions in Romania could increase by up to 7 times, reaching up to EUR 350 milllion and a total aggregated economic impact of up to EUR 1.4 billion, over 5600 workplaces and taxes paid of EUR 110-140 million. Added to this there could also be indirect benefits from promoting the country abroad and tourism development”, Mihaela Mitroi, Tax and Legal Services Leader, PwC Romania, added.
If such a state aid scheme would be applies, PwC estimates that it will generate budget revenues up to 4 times higher than the value of the subsidy, which is estimated at up to EUR 35 million per year (paid only if Romania attracts relevant and eligible film productions).