The Minister of Culture explains how, thanks to incentives, the cultural and creative industries are setting record figures and boosting GDP.
Over the last four years, the cultural and creative industries have accounted for approximately 3% of GDP, generating 522,000 jobs, according to figures from the DANE’s satellite account of culture and the Orange Economy.
In this way, we have recovered in the current year a number of jobs equal to what the cultural sector had before the pandemic. Another figure that fills us with great satisfaction is the collection of the public entertainment law. In 2022 we have had a higher collection than we had in 2019, which has been the best historical year since the law has existed; in all of 2019 $30,000 million was collected and as of April 2022 we had already collected more than $15,800 million.
There has been a boom, a push, in streaming. How has this been boosted?
This has been thanks to four factors: The first is that Colombia already had important tax incentives in the audiovisual sector and the government has strengthened them and created new ones, such as audiovisual investment certificates. The second is that we have strengthened institutional support for audiovisual productions, simplifying procedures, turning them into Projects of National and Strategic Interest, Pine, facilitating the importation of goods required for audiovisual productions; The third is that Colombia has a very important human capital in audiovisual matters, our national industry has been preparing for decades; and the fourth is that we have a diversity of locations thanks to our natural wealth that allows us to recreate audiovisual productions in different scenarios in our country. But, without a doubt, Colombia has one of the best tax incentive schemes in the world and in Latin America for bringing in foreign investment in audiovisual production.
How much is this foreign investment amounting to?
We created the Audiovisual Investment Certificate, which is a security equivalent to 35% of the total expenditure of an international production company in Colombia, in alliance with national production companies. What is required? That the minimum expenditure of these production companies is US$475,000 in our country, thanks to this we have achieved 53 audiovisual projects in Colombia since 2019, which have allowed us a historical investment of $1.1 billion in audiovisual production, generating more than 20,000 jobs. We have the most important production companies in the world working hand in hand with national production companies, streamings as important as Netflix, HBO, Amazon, Telemundo, Disney, among others, and highlighting national talent in companies as important as Dynamo and CMO, and news that fills us with pride is that today the most watched series in the world is Pálpito and it is a Colombian series, produced by CMO and would benefit from the Audiovisual Investment Certificates.
Can you tell us more about how to access the audiovisual investment certificates?
In order to be eligible they must invest a sum of more than US$475,000 in our country and they are required to apply. It is an incentive that we are studying at the Ministry of Culture with the support of Proimágenes. Once the production is developed, the production company receives the title deed, which can be transferable in the stock market. The production companies can negotiate this title with anyone who has to pay income tax, this means that the production companies in the stock market are getting a 35% discount on the total amount they spent on their production once they manage to sell this title, and this has made Colombia a much more attractive country because it is an innovative incentive scheme, which has allowed us to have local human capital and bring in a significant number of productions. Before the certificates existed Colombia, between 2013 and 2019, on average each year attracted foreign investment of $45,000 million and in 2021 alone we had investments of over $690,000 million.
The Orange Economy policy created a new framework of tax incentives to promote investment in cultural and creative industries. One of them has been the Corporación Crea Talento, CoCrea, which administers another tax incentive that involves a 165% deduction of the contribution made by a company that finances a cultural project and has become an indispensable tool to bring the business sector closer to the cultural sector, and to generate greater awareness in the business sector about the importance of investing in culture. Today, through CoCrea, we have managed to finance 47 projects throughout the country since 2020, with an investment of more than $90,000 million. Another incentive that has been very significant has been the exempt income for Orange Economy companies, especially for reactivation. The Orange Economy companies, which are more than 26 ISIC codes, will not pay income tax for the next five years, today we have achieved that more than 1,080 companies have applied directly to this benefit whose requirement is to create at least three jobs during the years that the benefit is available, this has allowed us to create approximately 8,500 formal jobs in the last two years.
A few days ago you presented the National Arts Centre. Are there more infrastructure works of this kind?
This is the largest infrastructure work that the Ministry has done in its 25 years of existence and, of course, it is the largest that we had to deliver to the country and it will begin its programming at the end of June.
We are working on cultural infrastructure, not on the scale of the National Arts Centre, but very important for parts of the country that have historically lacked cultural infrastructure; for example, in the department of Chocó we have already delivered the cultural centre in Bahía Solano, but we are developing libraries in other municipalities such as Atrato, especially in the Pdet municipalities that require investment.
At the moment, we have more than 28 infrastructure projects underway and we are investing in Antioquia, Cauca, Putumayo, in the Colombian Caribbean, and of course this is part of closing gaps in terms of cultural access in fifth and sixth category municipalities in our country.