KUALA LUMPUR: The Arts, Live Events and Festivals Association (ALIFE) is concerned over the recent imposition of a 25 per cent entertainment tax on all live performance events in the federal capital by City Hall.
Its president Rizal Kamal said in a statement today that this unexpected development had caused significant disruptions to on-going and forthcoming events throughout the country.
Rizal said that while ALIFE acknowledged the previous exemption of the entertainment tax by the Selangor government, granted through this year's state budget announced by Mentri Besar Datuk Seri Amirudin Shari, event organisers had now found themselves in a "disconcerting situation" marked by a lack of clear communication.
"Event organisers have not received any official communication or notification from City Hall and Selangor's local authorities detailing the exact percentage and terms of the entertainment tax. This has placed us in a position of uncertainty."
Rizal added: "We are witnessing event organisers grappling with complex decisions on compliance in the face of inadequate information. This stifles our industry's growth and also its contribution to the nation's economy."
He said that 78 events had been forced to adhere to the new legislation or face the cancellation of their shows.
"The proposed 25 per cent entertainment tax ranks among the highest in the region. When combined with additional financial obligations such as a 15 per cent withholding tax, a RM500 levy, and an additional bond mandated by the Immigration Department on artistes, crew members and musicians, the cumulative fiscal burden becomes exceptionally demanding.
"This is further exacerbated by elevated rental expenses for prominent venues like the Bukit Jalil National Stadium and Axiata Arena."
ALIFE chairman Para Rajagopal said: "Live events constitute a substantial part of the nation's cultural and economic fabric, generating income through accommodation, food and beverage, and transportation. They provide employment opportunities for countless young professionals within the gig economy and contribute to both domestic and international tourism.
"The live performance music industry comprises 45 interdependent sectors that collaborate in concerts. The new tax impacts the livelihoods of numerous professionals and enterprises."
Rajagopal added that concert ticket prices would rise beyond those of cinema admissions and theme park entries, and burden concertgoers especially teenagers and young adults.
Rizal said that while ALIFE acknowledged the necessity of generating revenue for local authorities, the successful implementation of the tax required a reasonable and well-defined transition period for organisers to adjust their financial strategies.
"We urge City Hall to consider implementing a grace period for the inclusion of the entertainment tax in concert ticket prices. This should take into account the broader implications for organisers and audiences.
"We remain steadfast in our commitment to sustainable development of Malaysia's dynamic live events industry," he said.