The screening of Indian films might have brought some windfall for the owners of local cinemas, but it has also attracted the attention of the relevant provincial authorities exploring new avenues of tax collection, it emerged on Wednesday. The Sindh excise and taxation department has requested the government to allow collection of cinema tax which was suspended in 2005 on an appeal by the cinema owners to help revive the moribund industry adversely affected by the advent of the VCR and later the cable network.
As a result, many cinema owners turned their buildings into commercial plazas and the number of movie houses drastically decreased. The cinema owners held a meeting with the governor of Sindh on July 23, 2005 and requested him to suspend collection of cinema tax to support the decades-old industry. The governor accepted the request and ordered that collection of cinema tax be withheld till further orders. Although no notification was issued to suspend collection of tax from cinemas, the excise and taxation department acting on the advice of the governor stopped collecting tax. Dawn
Secretary for Excise Manzoor Memon told that the department had now asked the chief minister to reexamine the policy of temporary tax exemption to the cinema owners, who seemed to be doing good business with Indian films. It was further pointed out that besides the screening of Indian movies the cinema industry had shown signs of recovery with the advent of new film technologies like 3-D films. The secretary has asked the finance department to either issue a notification for tax exemption or stop issuing audit paras for non-collection of cinema tax since 2005.
Sources in the department revealed that the average annual collection of tax from cinemas was Rs10 million in 2005 before the collection was suspended. According to the tax schedule notified by the government, there is a special tax rate of Rs2,000 per day for some air-conditioned cinemas in the city. The tax rate for other air-conditioned cinemas is Rs1,000 and Rs500 for non-AC movie houses.
The tax rate for air-conditioned cinemas in Hyderabad is Rs750, and for non-AC Rs500. For other cinemas in the interior of the province the tax rate is Rs400 for air-conditioned movie houses and Rs200 per day for non-AC ones. There is, however, no tax on touring talkies, open-air cinemas in the interior of Sindh and mini-cinemas. Meanwhile, the Cinema Owners Association said that the industry was beset with a number of problems but the government engrossed in other serious issues had no time to attend to their woes.
Association vice-president Asif Razzaq said that the tax was withdrawn during the tenure of Sheikh Rashid who was a culture minister in 2005. The average number of viewers per day range between 70 and 100 against a hall capacity for 200 to 350 audience, resulting in losses to the cinema owners. Answering a question, Mr Razzaq said the rate of cinema tickets was increased early this year to Rs70 from Rs50 for lower class and Rs150 from Rs100 for middle class and to Rs250 from Rs200 for upper class.
He however admitted that the number of movie houses in the city was again picking up and three new cinemas had started screening films in the Clifton area while two more were in the offing. A new trend in the cinema industry has emerged in which large cinema houses screen three to four movies at a time with a hall reserved for new technology 3-D movies.
