By A. Stephanie
Cinema giant Golden Screen Cinemas Sdn Bhd (GSC) is lobbying the Customs and Treasury departments in an effort to reduce or waive the entertainment tax levied on film exhibitors, once the goods and services tax (GST) kicks in April 1.
GSC chief executive Koh Mei Lee said the cinema giant is doing this via the Malaysian Association of Film Exhibitors comprising GSC, Tanjung Golden Village (TGV), Mcat Box Office (MBO) and Lotus Cinema, and other exhibitors.
She commented, “We would like to see the existing entertainment tax be reduced or totally taken off.
“GST is only 6%, but we are paying entertainment tax of 20% gross on the ticket price. It’s quite unfair on the industry as then we would have a dual-consumption tax,” Koh added.
However, she admitted that entertainment tax is also decided on a state-by-state basis, and thus negotiations on possible reduction or waiver of this levy would take time.
The screener expects only a temporary drop in admissions once GST is implemented.
“Tickets cost RM15, and GST would be 72 cents, pushing admission fee up to RM15.72. It is a small ticket item, and will not have a major impact on pockets,” she told reporters and analysts at the PPB Group Bhd fourth quarter 2014 results briefing today.
GSC is 100% owned by the Robert Kuok-controlled PPB Group, and is Malaysia’s largest film screener with 284 screens in 31 outlets, capturing 40% of domestic box office collections.
It is planning to add another 100 screens for a total of 384 screens nationwide by 2017.
The screener opened two cinemas in 2014 – one in Seremban Palm Mall and the other in Quill City Kuala Lumpur – both with 10 screens.
Of the PPB Group’s capital commitment of RM535 million for 2015 to 2017 for core operations, RM283 million or 52.9% will be spent on GSC.
Koh elaborated, “During this period, we have planned to expand to 11 new locations. So far, three have opened in Nu Sentral, IOI Putrajaya, and Ipoh Parade.
“For the remaining of the year, we will likely open another three – one each in Alor Star, Bintulu and Klang Parade,” she said.
“We have also started renovations in our flagship cinema at MidValley Megamall, where we currently have 18 screens. We have closed the Gold Class screen, and will add another four screens to make it 21, which should be open hopefully in time for the summer blockbusters,” Koh added.
Going forward, GSC’s focus remains in the Klang Valley, where it registers the highest admissions, and further screens are planned in Melawati Mall, Selayang Star City Mall, Cheras and Shah Alam.
GSC posted profits of RM14 million in 4Q14 compared to RM11 million in 4Q13, and for the full 2014, the segment’s profit before taxes (PBT) grew 23% to RM61 million.
Film revenue of RM96 million in 4Q14 and RM371 million for FY14 represented an increase of 9% and 8% respectively compared with the same periods in 2013.
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