State govts urged to give theme parks tax exemptions to promote recovery

  • Nation
  • Thursday, 16 Dec 2021

Deputy Tourism, Arts and Culture Minister Datuk Seri Dr Santhara Kumar - Filepic/The Star

KUANTAN: State governments are urged to follow the Federal Government's example of granting the theme park industry an exemption from the 25% entertainment tax.

Deputy Tourism, Arts and Culture Minister Datuk Seri Dr Santhara Kumar said the theme park sector had been facing difficulties as it was among the last activities allowed to resume operations after the movement control order.

He said in order to encourage attendance, all theme parks in the federal territories had been granted an entertainment tax exemption under Budget 2022.

"In this respect, the ministry welcomes measures by state governments such as that of Johor, Penang and Selangor to help reduce the burden of theme park industry players by granting full exemption of the entertainment duty.

"At the same time, the authorities of other states are urged to grant such an exemption to continue supporting the recovery of this sector," Santhara told the Dewan Rakyat on Wednesday (Dec 15).

Santhara also said it was time to review the Entertainments Duty Act 1953 (Revised 1973) after such a lengthy period, although this would fall under the purview of the Finance Ministry.

"Reclassifying theme parks as tourism centres falls under this Act which is from before independence. It is not under the jurisdiction of the Tourism, Arts and Culture Ministry.

"However, in principle, we are confident the duty can be reviewed. On the ministry's side, we are prepared to assist these theme parks," he said in reply to a supplementary question from Dr Maszlee Malik (PH-Simpang Renggam).

Maszlee proposed to reclassify theme parks as tourism centres or amend the Act to exempt them from the entertainment tax, saying that it had become a burden for operators and also an impediment for low-income families to visit theme parks due to the high price of tickets.

The Malaysian Association of Theme Park & Family Attractions (MATFA) recently expressed its regret over the Pahang government's move to continue imposing the 25% entertainment tax on theme parks and family entertainment centres.

In its reply to the association dated Nov 25, the Pahang Finance and Treasury Office stated that the state executive council had rejected an application for an exemption from the entertainment tax.

MATFA president Tan Sri Richard Koh said theme park operators would have no choice but to pass the tax to customers after the latest rejection from the state government.

Koh described the entertainment tax as a "colonial era tax" originally meant to cover "sin taxes" for entertainment that comprised activities like cabaret, gambling, joget dancing and others.

He claimed it was a regulatory measure that had not caught up with the evolution of business and entertainment concepts.

Pahang tourism, culture, environment, plantations and commodities committee chairman Datuk Seri Mohd Sharkar Shamsudin declined to comment on the matter, saying that the entertainment tax was under the local authorities.

However, state local government and housing committee chairman Datuk Abd Rahim Muda, when contacted, passed the buck to the state Finance and Treasury Office instead.

The state Finance and Treasury Office could not be reached for comments while the Mentri Besar's office had yet to respond to requests for comments as at press time.

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