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Double taxation feared to nip amusement sector in the bud

By Javed Mirza
November 03, 2019

KARACHI: Double and higher taxation may lead to shutdown of budding amusement arenas in addition to compel investors to shelve their business expansion plan, an industry official said.

Akmal Saeed, general manager of AA Joyland said Sindh Revenue Board levies 13 percent sales tax on amusement parks, while the provincial excise and taxation department imposes an additional 25 percent entertainment duty

“There has been a drastic increase in taxation on amusement activities,” Saeed said. AA Joyland curates Aladin Amusement Park, Pavilion End Club, Super Space, Bounce Trampoline, Battle Station and chain of parks across Pakistan.

The biggest player in the country’s amusement industry is perturbed over an excessive taxation, as higher taxation coupled with higher cost of doing business might impact the company’s expansion plans.

Saeed said the new tax regulations are constraining revenue generation and it is feared that many of the amusement arenas and parks would shut down due to higher costs of taxation and would also inflate unemployment rate.

“We are willing to serve more citizens under public-private partnerships,” he added. The company has planned setting up in-door theme parks in Sialkot and Quetta. The company has also considered an initial public offering, but the plan is at a very initial stage.

“If the government is willing to work shoulder-to-shoulder with us by lowering taxes, then together we can stimulate the tourism industry and help Pakistan grow expeditiously economically,” Akmal said. “This would not only provide entertainment at affordable prices due to tax concessions but also create job opportunities for the locals.”

Akmal said tax concessions and subsidy could help amusement industry achieve much more and also contribute towards gross domestic product.

“Affordable tickets will result in more revenue generation, meaning more affordable entertainment for the public and contribution to the economy,” he added.

“If non-functional parks and grounds are outsourced to local recreational companies, then these recreational facilities can be operated expeditiously without the government having to bear operational costs.”

Recently, the federal government constituted a tourism committee to regulate and promote all tourism affairs. However, the role of amusement industry has been utterly overlooked and ignored. Amusement and tourism industry go hand-in-hand as many tourists find amusement parks and arenas an ideal tourism points, Akmal said, citing an example of Florida where many tourists visit just to drop by Disneyland.

“The government can procure taxes from the boom of the amusement and tourism industry which can be then invested into infrastructural and economic development,” he said. “Plus, the boom of the amusement industry can result in higher rate of employment for day-to-day operation and in construction sector if new parks are built.”