KUALA LUMPUR – As Covid-19 lockdowns are lifted and the nation inches cautiously towards endemicity, the live performance industry – one that ought to be greeting the news with ardent fervour – is instead faced with yet another stumbling block that, according to members of the fraternity, threatens to derail its hopes of a smooth post-pandemic recovery.
The obstacle in question is an entertainment duty the Selangor government imposes on all ticketed art and stage performances.
Announced by the state treasury on February 17 last year, the tax is charged at a rate of 15% for local performers and 25% for shows featuring international performers.
During the winding up session of the state budget later that year, Menteri Besar Datuk Seri Amirudin Shari explained that earlier exemptions of the tax resulted in over RM50 million in losses for the state.
He then took to Twitter, clarifying that the tax wasn’t new, but was in fact a reduction from a previous rate of 25% for local performers.
Despite a widely circulated social media petition and pleas from multiple stakeholders calling for a waiver of this duty, cries appear to have fallen on deaf ears as performers, producers, and venue owners alike continue to bemoan the tax.
A tough few years, made even tougher
Stand-up comedian Kavin Jay, who recently held a live stand-up comedy show in Selangor, deplored the state’s decision to charge the tax, calling it “completely absurd”.
Speaking to The Vibes, Kavin says that imposing a tax on performers after the pandemic “is like fining someone for illegal parking after they’ve been in a car accident.”
Last month, Kavin’s self-produced show at the Petaling Jaya Performing Arts Centre (PJPAC) was required to pay the 15% charge before a local council licence was issued.
What’s more, he said, the sum has to be paid up front based on a projection of 100% ticket sales.
“If your show is going to sell 500 tickets, you have to pay 15% on that amount even before you sell the tickets,” he said, adding that self-producers with little to no capital often find it difficult to fork out the sum.
Kavin goes on to explain that if the show does not sell out, producers have to apply for a refund of the balance, a process that he said could take months.
The comedian of over 14 years said that in his experience, the average profit margin for a show is 10% to 15% – an amount that, due to the entertainment tax, will now move into the negative.
I can’t raise my ticket prices. What about the fans?” Kavin exclaimed. “I really don’t think I can do shows in Selangor anymore. I just can’t afford it.”
When asked why he does not do shows in Kuala Lumpur instead, Kavin answered that as there are only a handful of venues in the Klang Valley suitable for stand-up comedy, “we can’t be using the same ones all the time.”
Previous rates more manageable
This aversion to holding shows in Selangor was echoed by the Arts, Live Festival and Events Association (Alife), a group representing performers as well as producers of live shows in the country.
Its president, Rizal Kamal, told The Vibes: “I’ve been in business for 12 years and I’ve never seen this kind of tax.”
He added that previously, producers were charged between 0% and 5%, a figure that was manageable compared to the current 15%.
In response to the Selangor menteri besar’s claim that the state had lost RM50 million due to uncollected taxes, Rizal claimed the figure includes entertainment tax paid by cinemas and theme parks.
“The bulk of the amount doesn’t come from us,” he added.
In January, Alife sent a letter to Amirudin, calling the tax “an undue heavy burden” and requesting it be reduced to 0% for local performers and 5% for international performers.
According to Rizal, Alife has yet to receive a response from Amirudin or his office.
The Vibes has reached out to Amirudin for comment.
Besides performers and producers, venue owners in Selangor are also forced to bear the brunt of the cumbersome levy.
Francis Teo, head of convention centres at SP Setia Bhd, said that as the current economic situation has made audiences smaller, imposing the tax now will only “make things worse”.
Teo also expressed fears that the additional cost will ultimately be passed on to audience members, which will then further deter attendance for such events.
Brian Kwan, theatre manager of PJPAC at 1 Utama, shared this sentiment.
He related how many organisers were apprehensive due to the tax, with some being forced to forego venues in Selangor for tax-free ones in neighbouring Kuala Lumpur.
Kwan said waiving the duty would greatly assist the industry as “the performing arts provide intangible contributions to the state.”
Entertainment tax: more harm than benefit?
A common thread among people The Vibes spoke to was how the entertainment tax would likely cause more harm than good to Selangor’s coffers.
Selangor will lose out on the multiplier economic benefits (sic),” said Kwan, explaining that besides buying tickets, audience members also spend on food, drinks, and even parking when attending shows.
Furthermore, when international borders reopen, he said Selangor stands to lose out on precious tourism revenue when producers choose to hold shows in other states.
Expressing similar concerns was Bandar Utama assemblywoman Jamaliah Jamaluddin, who said the tax was too high.
Calling the current transition to endemicity a “critical period” for the entertainment industry, she said that, as its practitioners have only just begun to resume generating income, “we should think about how to encourage them to make a comeback in the industry.”
Promising to raise the matter in the next sitting of the state assembly, Jamaliah emphasised the importance of looking at the “big picture”.
“Is this situation going to create domino effects (in other industries)?” – The Vibes, March 14, 2022
