PETALING JAYA: Industry groups have called for the entertainment tax to be scrapped, saying the decades-old levy is pricing Malaysians out of leisure and entertainment.
Industries Unite said the tax, which is as high as 33% including the Sales and Service Tax (SST), affects industries ranging from theme parks and shopping malls to cinemas and live events.
Industries Unite spokesperson Datuk David Gurupatham said the coalition, representing about 3.3 million businesses, was calling for a review of the Entertainment Duty Act 1953 and closer cooperation between the Federal and state governments, as entertainment tax falls under state jurisdiction.
“The cost of doing business has increased significantly, and this tax is often passed on to consumers through higher ticket prices.
“It also affects tourism, local artists and the viability of businesses in the entertainment sector,” he said at a joint press conference yesterday.
Malaysian Association of Themepark & Family Attractions (Matfa) said the 73-year-old law was no longer relevant as it was taxing family-oriented recreation rather than the adult-centric entertainment it was originally intended to regulate.
Matfa president Tan Sri Richard Koh said Malaysia’s entertainment tax was among the highest in the region, while countries such as Singapore and Hong Kong imposed no such tax.
“We are taxing family happiness and children’s smiles. Entertainment for families should not be treated as a luxury,” he said.
Koh acknowledged temporary tax reductions by the Federal Government and the Selangor government but said operators needed a permanent solution instead of having to negotiate different tax rates with individual states.
“Inconsistent tax rates and licensing requirements across states had made operating family attractions increasingly difficult, with higher costs ultimately passed on to consumers,” he said.
Association of Live Event Organisers (Alife) said abolishing the entertainment tax would make ticket prices more affordable, attract more international performances and generate wider economic benefits.
Senior adviser Rizal Kamal said live events supported hotels, restaurants, transport providers, retailers and thousands of workers through the multiplier effect.
He noted that while Kuala Lumpur had committed to a 0% entertainment tax for local artists and 10% for international performers until 2028, most states continued to apply varying tax rates and policies.
“What investors need most is certainty. Stable, long-term policies will encourage investment, create more events and strengthen Malaysia’s creative economy,” he said.
Rizal added that industry modelling suggested abolishing the tax could potentially double the number of live events within two years, significantly increase attendance and generate higher overall tax revenue through broader economic activity.
Meanwhile, Malaysia Shopping Malls Association (PPK) advisor Tan Sri Teo Chiang Kok said entertainment and leisure had become an essential part of modern life and should no longer be viewed as a luxury.
“Entertainment-related activities now occupy up to 30% of shopping mall space, compared with just 5% about 15 years ago, reflecting growing consumer demand,” he said.
Teo added that Malaysia was losing international concerts and events to neighbouring countries offering tax exemptions and incentives, while organisers here also faced upfront entertainment tax payments and regulatory uncertainty.
“Repealing the Entertainment Duty Act would encourage investment, boost tourism spending and generate greater economic returns than the tax currently collected by state governments,” he said.
