KARACHI, July 27: Cinema owners are not likely to pass on to cinema-goers the benefit of a tax cut recently offered by the Sindh government. Analysts recall that the cinema owners did not also pass on the benefit of a cut in entertainment tax offered by the government in 2001. The Sindh government abolished entertainment tax on cinemas recently.

Cinema owners told Dawn on Tuesday that they were facing such huge losses that they would not be able to bring down ticket prices.

“We concede that abolishment of entertainment tax is a very welcome move by the Sindh government, but it was long overdue. Actually this tax was not in force in other provinces. Let me also tell you that this is not a permanent solution to the financial woes of the ailing film industry in the country,” said Nawab Huzoorul Hasan of Nishat Cinema.

He recalled that Karachi had 110 cinema houses in the past. “Now the city has only 36 cinemas. Similarly, the number of cinemas in Hyderabad has come down from 22 to four. There were 75 cinemas in the interior of Sindh. Now there are only 20 cinemas,” he deplored.

Mr Hasan said that a tax cut would not bring back cine-going crowds, adding that it would merely help the cinema owners keep their heads above water.

He conceded that ticket prices would not come down because of the abolishment of entertainment tax on cinemas.

On July 1, 2001, the Sindh government abolished the 55 per cent entertainment tax on the daily revenue of the cinema owners. It devised a fixed-rate taxation system based on the classification of the cinemas of the city into three categories. But the incentive offered by the Sindh government was not passed on to cinema-goers.

Making out a strong case for the screening of Indian movies in Pakistan, Mr Hasan said that this was the only solution to the problem of the film industry.

Zulfiqar Ramzi, a former owner of a cinema, said cinema owners would not be able to pass on the benefit of the recent tax cut to cinema-goers. He added that losses incurred by them on a monthly basis would prevent them from passing on the benefit.

Another cinema owner, who did not want to be named, agreed that tax cuts allowed by the government a couple of years ago should have revitalized the ailing cinema industry. “But at the same time the government allowed cable operators to show Indian movies through their networks. This move alone dealt a crippling blow to the cinema industry which was already struggling for survival,” he said.