LAHORE: The Punjab government is likely to impose 5% sales tax on the entertainment industry from the next fiscal year, said reliable sources.

It may be noted that the industry was enjoying waiver of duty for the past 15 years which is most likely to be lifted by the end of the current fiscal year. The sources from the Punjab Revenue Authority (PRA) said the Authority has already initiated compulsory registration of cinemas and theatres in the city with the start of the ongoing month of April. They have pointed out that the Authority had extended six opportunities to the industry for voluntary registration instead of the regular three opportunities under the law. However, only one, out of 26 cinemas and theatres, turned up for voluntary registration.

The cinemas and theatres included Alfalah Theatre, Amana Mall Cinema, Anguri Cinema, Arena Lahore, Bari Theatre, Cinegold Lahore, Cinegold Plex Lahore, Cinepax Cinema Amana Mall, Cinepax Cinema Fortress Square Mall, Cinepax Cinema Lake City, Cinepax Packages Mall, Cue Cinemas, Gulistan Ciname, Imperia Cinema, Mahfil Cinema, Malik Theatre Cinema, Metropole Cinema, Odeon Cinema, Pakistan Talkies Cinema, Sitara Theatre, Sozo World Cinema, Super Cinema Royal Palm, Super Cinema Vogue, Tamaseel Theatre and Universal Cinema Emporium Mall.

It may be noted that the PRA can impose a fine of Rs50,000 initiate recovery proceedings and seal the business sites in case the taxpayer evades compulsory registration with the Authority. The Punjab government had empowered the PRA through Finance Bill 2021 to levy entertainment tax against cinemas, theatres, fashion shows, and other commercial or semi-commercial events, which was earlier domain of the Excise Department.

The responsibility was extended to PRA on the premise that the entertainment industry falls in the services sector. Therefore, it should be collected by the revenue authority instead of the excise department. Meanwhile, the sources from the Film Exhibitors Association said taxes on cinema should be imposed keeping in mind the seating capacity of cinemas and an average of the total tickets sold. They have also expressed the hope that the PRA, like excise department, would not deputize personnel in cinemas.

Copyright Business Recorder, 2022