Sri Lanka to abolish entertainment tax across the board
Sri Lanka’s film production, distribution and screening at cinema halls will be given an official recognition as an industry by overhauling and modernising the outdated national film corporation, Finance Ministry sources divulged.
It has been revealed that cabinet approval is essential, and will be sought, to abolish the entertainment levy imposed in accordance with archaic entertainment tax ordinance.
A cabinet memorandum will also be presented soon giving prominence to the entertainment sector including cinemas for its consideration as a formal industry while scrapping the entertainment levy on the directions of President Ranil Wickremesinghe, they disclosed. This would include entertainment taxes on hotel events and open-air shows.
The aim is to transform the National Film Corporation into a film and tele-drama industry development company by leveraging modern technology to provide state assistance to boost local cinema attracting foreign direct investments, a senior official of the ministry said.
This was a result of a request made by a group of senior artistes and musical show organisers to the president at a meeting recently. Thusitha Halloluwa, presidential director general on public relations, coordinated the meeting.
Earlier every local authority had the power, by resolution, to impose and levy a tax on payments for admission to entertainments held in the area within the administrative limits of such authority at such rate or rates as may be specified in such resolution.
According to those earlier provisions, the entertainment tax may be imposed at different rates for different amounts of payments for admission; however the rate applicable in the case of any such amount shall not be less than 5 per centum or more than 25 per centum of the amount.
Sri Lanka Tourism is optimistic about giving prominence to the entertainment sector’s foreign direct investments (FDIs) in the future in order to keep the city active with tourists via entertainment.
With several multiplexes planned, further growth in film industry is envisaged. The industry has drawn up plans to increase the audience base to 10 million by 2025 from 7 million at present.
NFC as the de-facto regulator too benefitted, gaining 10 per cent per ticket sold, several cinema hall owners complained, urging an overhaul of this industry.
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