ALIFE, the Association for Live Performance, has urgently called for a comprehensive review of the 25% Entertainment Tax on Live Performances imposed by the Dewan Bandaraya Kuala Lumpur (DBKL) in Wilayah Persekutuan. In a letter addressed to government authorities, ALIFE emphasised the need for immediate action to prevent economic consequences and to ensure the continued competitiveness of the live performance industry in the region.
The 25% Entertainment Tax rate, established in 2001 and last updated in 2006, is no longer aligned with the current socio-economic landscape. The live performance industry has evolved significantly since then, with changes in ticketing systems being just one example. The use of e-ticketing in 95% of events, facilitated through mobile apps and email, has rendered the existing stamped ticketing system obsolete.
In the past decade, the live performance industry in Wilayah Persekutuan was exempted from entertainment tax due to various factors, including Visit Malaysia Year (2014), the implementation of the Goods and Services Tax (GST) from 2015 to 2018, efforts to boost tourism (2019), and the impact of the COVID-19 pandemic (2020 – 2022). The sudden imposition of high Entertainment Tax rates could have severe repercussions, potentially leading to the industry’s collapse, especially when many producers are still recovering from nearly three years of inoperability during the pandemic.
ALIFE underscores that the live performance ecosystem involves tens of thousands of individuals, including artists (both local and international), venues (theatres, convention centers, concert venues), suppliers, promoters, and gig workers, among others. A modern and consistent approach to taxation is essential to enable the industry to compete with its regional counterparts. Notably, neighbouring countries like Singapore and Thailand impose 0% entertainment tax but collect Goods and Services Tax (GST) and Value-Added Tax (VAT) on tickets. Any rate higher than these countries’ tax structures would diminish Wilayah Persekutuan’s competitiveness, resulting in the loss of international concerts, festivals, and shows.
ALIFE has actively engaged with government ministries, including the Ministry of Finance, Ministry of Tourism, Arts and Culture, and the Ministry of Communications and Digital Economy, to address this critical issue. While there is unanimous agreement that a high entertainment tax could have detrimental effects on both the industry and the nation, a conclusive decision has yet to be reached.
To avert an impending crisis and safeguard the live performance industry, ALIFE implores the government to conduct a comprehensive reassessment of the Entertainment Tax structure in Wilayah Persekutuan. Failing to act swiftly could lead to event cancellations, substantial income loss for artists, producers, venues, and workers, and damage to the nation’s reputation as a welcoming and business-friendly country.