Over 1 million jobs are at stake! Pakatan Selangor state govt urged to exempt entertainment duties in order to revitalise industry & stimulate economy

With over a million jobs at stake, MCA Youth calls on the Pakatan Selangor state government to realign its interests with the entertainment industry and emulate the federal government's decision on entertainment duty exemption.

The imposition of an entertainment duty following Pakatan's release of Budget Selangor 2022 raised grave concerns about the unequal treatment accorded to various segments of the entertainment industry. For instance:

• Theme parks in Selangor must pay 5% for the next five years, (up from a full exemption from the 25% exercised from March 2020 to December 2021);

• The entertainment tax was reduced by 10% for domestic artistes but remained unchanged for international artistes;

• A 15% tax on ticket sales for performances by local artistes and a 25% tax on performances by international artistes.

• Despite experiencing the sharpest sales contraction in history of up to 85%, cinema operators received no exemption or reduction in entertainment duty.

According to the Statistics Department, the entertainment industry in Malaysia contributed 2% to GDP over the last five years and created over a million jobs.

Entertainment industry among hardest hit

The entertainment industry is not immune to the financial gloom that afflicted the majority of Malaysian business owners and their employees over the last two years. Indeed, it was one of the hardest hit sectors, with music performances, live concerts, film production, music, cinemas, and film festivals all suspended during the lockdown periods.

According to a 2020 report by the Cultural Economy Development Agency (CENDANA), 93% of entertainment industry players and backstage crew suffered losses. 70% of those surveyed are on the verge of losing or have already lost their primary source of income.

In 2020, cinemas in Selangor lost over RM80 million per year; an amount so staggering that Malaysia's third-largest exhibition chain, MCAT Box Office Sdn Bhd, was voluntary liquidated (MBO Cinemas). The cinema operators have been implementing cost-cutting measures and managing their cash flow carefully, but the prolonged closure has depleted their cash reserves and used up all available bank credit. Imposing a high entertainment tax is expected to exacerbate their financial situation.

For the arts community, it is doubtful that large corporations could absorb such a tax, let alone smaller productions by individual artistes with severely constrained resources.

Hopes for revival

Stakeholders in the entertainment industry approached MCA Youth to express their hopes for the sector's revival, citing the opportunities that could arise from the reopening of our international borders and the relaxation of Covid-19 restrictions.

As Malaysia enters endemicity, the reopening of Malaysia's international borders provides an opportunity for the country's tourism industry to begin rebuilding.

Parallel to this reopening, an entertainment duty exemption can help the entertainment industry grow by allowing players to devote a greater portion of their budget to promotion, which is expected to have a spillover effect on other sectors such as travel agencies, hotels, and transportation.

Jacob Lee Yee Yuan
MCA Youth Spokesperson

-MCA online-