KCB slaps Atrium cinemas with tax for showing ICC T20 World Cup matches

The Karachi Cantonment Board (KCB), in an unprecedented move, has slapped the Atrium cinemas with a tax notice, under advertisement regulations, for screening ICC T20 World Cup matches with permission.

All other major cinema companies of the city have denied paying any additional tax for the screening of ICC matches to any municipal agency in the past. Atrium cinemas owner Nadeem Mandviwalla said on Wednesday the cinema industry in the city was already struggling to cope with the damage of Covid-19 restrictions and a ban on foreign movies. In such circumstances, he said, such absurd taxes meant they should wind up their businesses.

The tax notice is of Rs71,780, calculated at per square foot of the three screens of the cinemas. The Atrium cinemas wrote to the KCB CEO on October 25 for permission to screen the remaining matches of Pakistan in the ICC T20 World Cup, after it screened the Pakistan-India match, and the KCB showed its resentment over the cinemas having not obtained its NOC earlier.

On October 29, the cantonment board dispatched a tax notice to the Atrium cinemas of Rs71,780 under entertainment fees. The notice, a copy of which is available with The News, has a calculation of the sizes of the three screens of the cinemas, based on which the cantonment has demanded the tax.

KCB Inspector Sarfaraz, talking to The News, said that there is always a tax for any NOC. It is a cinema where movies can be shown, but for other screenings such as of cricket matches, he said, there has to be a separate tax.

There are bylaws for regulation advertisement under cantonment areas, according to which they have calculated the amount of Rs71,780, he said. The size of the screen has been taxed per square foot as mentioned in the advertisement bylaws. It was under Sub Section (23) of Section 282 of Cantonment Act, 1924, according to which, he said, they are collecting the tax for screening matches.

Section 282 is about “power to make by­laws”. Its sub-section (23) talks about the regulation of the posting of bills and advertisements, and of the position, size, shape or style of name boards, signboards and signposts. When asked how the advertisement tax could be levied for screening a cricket match, he reasoned that the cinema had been a defaulter for many years.

The Atrium cinemas, he said, should pay Rs2,000 per day, per screen for screening movies. As there are three screens, he said, the cinema should pay for all three screens, but they only pay for two screens. To this, Mandviwalla said, according to the Sindh cinematograph rules, there’s no tax for a screen of a cinema having less than 200 seats and one of their cinema is under 200-seating capacity for which they are not liable to pay any tax.

“The cinema industry has been in turmoil due to the closure of cinemas for the last 18 months on account of the Covid-19 pandemic,” he said, adding that after 18 months they restarted the operations on October 22.

“Looking forward to the opportunity of showing the ICC T20 World Cup 2021, we also scheduled to show the matches in our Atrium cinemas, Karachi.” He lamented how, to their surprise, instead of facilitating them on showing the matches, the KCB had sent them a tax recovery notice.

“The KCB is putting the cinema industry in isolation, while the matches are being shown everywhere, especially after the performance of the Pakistan team in the T20 World Cup 2021,” he said.

Never paid

When the Nueplex Cinema, which operates in Defence Housing Authority (DHA), was contacted, its manager, Muhammad Nadeem, said that they often screen ICC cricket matches and have never paid any additional tax to any municipal authority, including that of DHA.

The Capri Cinema, which itself operates under the jurisdictional area of the KCB, also denied having paid any additional tax for screening ICC cricket matches. Capri’s manager Abdul Aziz said they only have to obtain permission from the channel who has the rights to show the match. “Never have we even sought permission to show the ICC cricket matches from the KCB, let alone paying any tax,” he stressed. Meanwhile, Mandviwalla said that they were already showing cricket matches in their cinemas in Islamabad and no federal municipal authority had imposed any tax on them.