Malaysian trade body hits out over 25% tax rate

The coalition representing Malaysia’s live industry is calling for an urgent review of a 25% entertainment tax, which it claims could have “catastrophic economic consequences” for the business.

The Kuala Lumpur City Hall recently imposed the rate on all live events held in the city centre, causing “significant disruptions to both ongoing and forthcoming events” throughout the country.

Rizal Kamal, president of the Arts, Live Festival and Events Association (ALIFE), warns the move would lead to an escalation in ticket prices and place Malaysia at a disadvantage against its peers.

“A modern and consistent approach to taxation is essential to enable the industry to compete with its regional counterparts,” says Kamal, as per the New Straits Times.

“Singapore and Thailand impose zero entertainment tax but collect Goods and Services Tax and Value-Added Tax on tickets. Any rate higher than these countries’ tax structures would diminish KL’s competitiveness, resulting in the loss of international concerts.”

“We urge the government to conduct a comprehensive reassessment of the entertainment tax structure in KL”

Live events were previously exempt from the entertainment tax, which was introduced in 2001 and updated five years later. Kamal says the rate is “no longer aligned with the current socio-economic landscape” and represents an additional burden for promoters still recovering from the pandemic.

“We urge the government to conduct a comprehensive reassessment of the entertainment tax structure in KL,” he says. “Failure to do so could lead to event cancellations, substantial income loss for artistes, producers, venues, and workers, and damage our reputation as a business-friendly country.”

Kamal, who says ALIFE has been engaging with the authorities in a bid to address the issue, previously noted that the 25% tax ranks among the highest in the region.

“When combined with additional financial obligations such as a 15% withholding tax, a RM500 [€101] levy, and an additional bond mandated by the immigration department on artists, crew members and musicians, the cumulative fiscal burden becomes exceptionally demanding,” he said. “This is further exacerbated by elevated rental expenses for prominent venues.”

Earlier this year, ALIFE spoke out in support of Good Vibes Festival promoter Future Sound Asia amid the global outcry over The 1975’s aborted headline set.

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