THE Arts, Live Events and Festivals Association (Alife) expresses profound concern over the recent unilateral imposition of a 25% entertainment tax on all live performance events held within the city centre by Kuala Lumpur City Hall (DBKL).
This unexpected development has reverberated across the live events industry, causing significant disruptions to both ongoing and forthcoming events throughout Malaysia.
While Alife acknowledges the previous exemption of the entertainment tax by the Selangor state government, granted through the 2023 Selangor budget announcement by Menteri Besar Datuk Seri Amirudin Shari, we now find ourselves in a disconcerting situation marked by a lack of clear communication. Event organisers have received no official communication or notification from either DBKL or the Selangor state local authority detailing the exact percentage and terms of the entertainment tax. This ambiguity has placed event organisers in a position of uncertainty, bordering on being held hostage by the local council – forced to choose between compliance or the risk of event permit denial.
Rizal Kamal, president of Alife, emphasises: “The absence of transparent communication has created a climate of uncertainty. We are witnessing event organisers grapple with complex decisions on compliance in the face of inadequate information. This stifles not only our industry’s growth but also its contribution to the nation’s economy.”
The omission of prior communication regarding the incorporation of the entertainment tax into concert ticket prices has introduced a level of uncertainty that affects both event organisers and the event-going public. Presently, an alarming total of 78 events have been forced to adhere to this new legislation or face the cancellation of their shows. Many of these organisers are resorting to legal counsel to navigate this unforeseen terrain.
Furthermore, it is imperative to acknowledge that the proposed 25% entertainment tax ranks among the highest in the region. When combined with additional financial obligations such as a 15% withholding tax, a RM500 levy, and an additional bond mandated by the Immigration Department on artists, crew members, and musicians, the cumulative fiscal burden on event organisers and the live performance industry become exceptionally demanding. This is further exacerbated by elevated rental expenses for prominent venues like the Bukit Jalil Stadium and Axiata Arena.
Para Rajagopal, chairman of Alife elaborates that “live events constitute a substantial part of the nation’s cultural and economic fabric, generating income through accommodations, food and beverage, and transportation sectors. They provide employment opportunities for countless young professionals within the gig economy and contribute to both domestic and international tourism.”
The ramifications of this entertainment tax extend beyond immediate financial implications.
The live performance music industry comprises an intricate web of 45 interdependent sectors that collaboratively execute concerts. The introduction of such a tax resonates throughout this ecosystem, impacting not only event organisers but also the livelihoods of numerous professionals and enterprises.
The potential outcome of this proposal is the escalation of concert ticket prices beyond those of cinema admissions and theme park entries. Considering a typical concert ticket price range of RM200 to RM600, the application of a 25% entertainment tax could substantially burden concertgoers, particularly the sizeable demographic of teenagers and young adults constituting a significant portion of the audience.
Alife acknowledges the necessity of generating revenue for local authorities. However, the successful implementation of such a tax hinges upon the establishment of a reasonable and well-defined transition period. This period is crucial to allow event organisers the opportunity to adjust their financial strategies and seamlessly incorporate the tax into their ticket pricing structures.
As a representative voice of the live events industry, Alife implores DBKL to consider implementing a grace period for the inclusion of the entertainment tax in concert ticket prices. This grace period should take into account the broader implications for organisers and audiences alike. By fostering an approach that prioritises balanced growth within the live performance music industry while safeguarding the interests of all stakeholders, Alife envisions a sustainable path forward.
Alife remains steadfast in its commitment to advocating for the sustainable development of Malaysia’s dynamic live events industry. This commitment is rooted in fostering an environment that enriches the cultural tapestry of society. – The Vibes, August 27, 2023
Arts, Live Festival and Events Association (Alife) is a not-for-profit body representing companies which conceive, develop, manage, host, support and promote live events – from the arts, festivals, concerts and others.
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