GST for movie tickets, Yay or Nay?

GST for movie tickets, Yay or Nay?

Movie tickets at cinemas may face the 6% GST. How will this affect movie goers?

Talking about taxes is about as unpleasant as forking out the extra ringgit and sen for it, but with the implementation of the Goods and Services Tax (GST) effective 1 April 2015, we can't help but wonder, how will this affect the cinemas and the everyday movie goer?

To understand this tax matter in-depth, was about as mind-boggling as it was to watch a Christopher Nolan film, but here at Cinema Online, we try to do our best to make it past the "Inception" of the various taxes to figure things out.

What is Entertainments Duty and why am I paying for it?

The Entertainments Duty Act 1953 of Malaysia states that admission to a place where any form of entertainment is held is subject to the Entertainments Duty. An additional 25% fee from the cost of per movie ticket at the cinema is chargeable and is to be paid to the tax collector, the Ministry of Finance, for whom the State government enforces and collects for.

According to our industry sources, the 25% tax was implemented only in late October 2011, before that, the tax ranged between 40% to 50% depending on the state.

Currently, this is how you are being charged for the Entertainments Duty:

For newly released or blockbuster movies that's priced around RM14, there's about a RM3 plus Entertainments Duty.

For speciality halls like, IMAX which generally have higher ticket prices, the 25% Entertainments Duty is higher too.

What is GST?

The new Goods and Services Tax is set at a fixed rate of 6% and will be implemented starting from 1 April 2015 onwards. The GST is set to replace the current Sales and Service Tax (SST) that is made up of - Sales Tax; between 5% to 10% and the Service Tax; that is 6%.

With the new GST set to eliminate the SST, it sounds like a pretty good deal mathematically doesn't it? Wrong, because movie tickets are not subject to the SST anyway, only the Entertainment Duty, that's why the latter is so high. The GST will be a new addition chargeable to the movie goer with the current 25% Entertainments Duty.

How does this affect my movie ticket pricing?

With an additional 6% GST to pay on top of your 25% Entertainments Duty, this will bring your total tax paid to a whopping 31%, and this is just to buy a single movie ticket. Since most of us don't go to the cinema alone often, imagine if you went to watch a movie in pairs or with your family. How much in tax will you actually be forking out?

What about concession snacks? Do I pay more?

TGV Cinemas Sunway Pyramid's popcorn concession.

Some cinemas have factored in the sales tax for their concession snacks like popcorn, chips and soft drinks so that their combo sets can have nice rounded figures and some even clearly state on the receipt that there's a sales tax of 6% charged.

With the GST also set at 6%, the implementation will neither make our wallets lighter, nor weigh it down. However, if you're thinking of dining at the cinema at TGV's Indulge or GSC's Glitters Cafe for which its meals include a 10% Service Charge then coupled with the 6% GST, things can get rather pricey.

GSC Cinemas' Glitters Café.

TGV Indulge.

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