Finance Minister Yuval Steinitz decided on Monday to grant tax benefits to encourage investment in both films and film production, following massive budget cuts the government recently imposed on the industry. The move will also benefit commercial television channels and satellite and cable companies, providing them a full deduction of investments under the Israeli Film Tax. "Israeli cinema makes a significant contribution to development of Hebrew culture and the cultural life of Israeli society," Steinitz noted. "In recent years, Israeli films have won international awards and have an important presence on the international stage-which also contributes to the world's image of Israel. Therefore, it is important to promote Israeli cinematic quality through tax policy-a step completing a decision we reached earlier this week, the creation of a new fund to produce a source of cinema in conjunction with Israel's television channels." The new regulations providing tax benefits for Israeli movie investors revoke limitations set in the past to decrease investment in Israeli movies-the compensation cap stood at approximately 45 percent of total investments. State regulations stipulate the tax bonus will also apply to the costs of production abroad, of which up to 15 percent is spent in Israel. According to the regulations, the tax benefits will be given to individual investors, production companies and film production partnerships. The new development is the Finance Minister's response to the budget cuts imposed on the Israeli film industry last month, from NIS 67 million to NIS 25 million. Each year, an average of 14 to 18 full-length feature films and 120 hours of documentaries are produced in Israel, at a cost of $500,000 to $1,000,000 per film and approximately $150,000 per hour of documentary.