Metropolis to punish cinemas for not paying entertainment taxThe metropolitan authority is preparing to punish movie theatres within its area of jurisdiction for failing to pay entertainment tax, a senior revenue official said.
The metropolitan authority is preparing to punish movie theatres within its area of jurisdiction for failing to pay entertainment tax, a senior revenue official said.
All of the 11 cinema halls and multiplexes in the Kathmandu Metropolitan City have never paid two percent of the total ticket sales amount for foreign language films as entertainment tax to the metropolis, according to chief of the KMC’s Revenue Division Dhurba Kafle. “They cannot forever escape the tax. The process to punish them has begun,” Kafle told the Post.
Of the 11 movie theatres in Kathmandu, six are operating in their own buildings while the remaining five have rented buildings. The KMC has been collecting house and land tax, vehicle tax, business tax and advertisement tax regularly from the theatres but has not been able to collect entertainment tax.
According to Kafle, by a conservative estimate, the KMC should receive at least Rs2.5 million in entertainment tax from movie theatres each year.
The Local Self-governance Act-1999 authorises the KMC to punish tax defaulters. Article 165 empowers the municipality to deny them services such as garbage collection and even to write to the concerned body to stop the transfer of ownership of the property of the defaulters and to freeze their trade. The properties may even be auctioned to recover the tax amount.
According to Kafle, the theatre owners argue that entertainment tax is no longer applicable after the introduction of Value Added Tax in 1998 for their refusal to pay entertainment tax.