KARACHI: The Sindh government has initiated a move to revive the entertainment duty on cinema tickets suspended in 2000 on the directives of the then governor.

The Excise and Taxation (E&T) department has put up the case with Sindh Chief Minister Syed Murad Ali Shah requesting him to undo the suspension order as the cinema industry business has improved a lot in the past 16 years.

The entertainment duty on movie tickets was put in abeyance due to poor business conditions of the industry in the province which threatened closure of many cinema houses with their buildings being converted into shopping malls.

According to the deputy director of the E&T department, Shabana Baloch, notices had been served to owners of 17 existing cinema houses to pay an entertainment levy as the movie business has improved with a substantial increase in the sale of tickets.

The entertainment duty rates for cinemas were revised in 2000 to Rs2,000 per day on tickets sold for the AC class, Rs1,000 for the upper-class and Rs500 per day for ordinary class.

Replying to a question, Ms Baloch said the cantonment boards were charging entertainment duty on new movie houses doing good business in their areas.

She said that the Sindh government also had claims on revenue from the entertainment duty collected from cinema owners in cantonment areas. The issue will be raised with the high ups in boards by the Sindh government, she said on Friday.

A tax official claimed that a major defaulter of the entertainment duty was the Karachi Municipal Corporation (KMC) — which does not pay duty on recreational facilities provided by the management of Safari Park and Karachi Zoological Gardens.

The department is suffering a revenue loss of about Rs44 million due to the tax non-compliance stance of the KMC.

It has rented space to private contractors at both places on handsome amounts to operate fun and recreational facilities for visitors but has not paid entertainment duty to the E&T department despite several requests and reminders.

Ms Baloch pointed out that notices had been sent to the contractors providing these facilities at the park and zoo, urging them to pay the entertainment duty on the sale of tickets.

She said that private water parks and amusement parks were paying duty regularly and their sales were checked by E&T officers. The rate of duty for water parks is 25 per cent of the entry tickets while organisers of musical programmes and dramas have to pay 10pc of the entry tickets and 5pc of the sales for sports events.

Under the law, owners of new parks have to inform the department about the start of business within 29 days and are required to get an approval for the entry rates from the excise secretary.

The E&T officers have to keep a watch on the flow of business at parks which are required to pay entertainment duty in advance for monthly or bimonthly sales.

Published in Dawn, December 11th, 2016