TN govt slashes entertainment tax from 8 per cent to 4 per cent; film industry welcomes move

Chennai, May 31 (IANS) In a significant move aimed at boosting the film industry, the Tamil Nadu government has issued an order slashing the Local Bodies Entertainment Tax on movie tickets from 8 per cent to 4 per cent.

The decision, which comes in response to long-standing appeals from the film fraternity, has been widely welcomed by producers, distributors, and industry bodies. Each year, more than 1,000 films are released across Tamil Nadu, and the 8 per cent entertainment tax - added on top of the GST- was often cited as a burden, especially for small and medium-budget films.

Members of the industry have repeatedly pointed out that the high tax structure was adversely affecting their ability to recover production and distribution costs, particularly in the case of low-budget ventures. Now, the state government's move to halve the tax is being hailed as a timely relief.

The Film Employees Federation of South India (FEFSI) expressed its heartfelt gratitude to Chief Minister M.K. Stalin for heeding the industry's plea.

In a statement, FEFSI said that the reduction would help revive the struggling sector and provide much-needed encouragement to smaller filmmakers.

However, theatre owners have expressed a more measured response.

Tirupur Subramaniam, a leading distributor, theatre owner, and former president of the Tamil Nadu Theatre Owners and Exhibitors' Association, welcomed the government’s intent but clarified that the reduction in entertainment tax would not lead to any cut in ticket prices.

Speaking to the media, Subramaniam said, "There's a misconception that theatre owners will now reduce ticket prices. That's not true. In fact, we haven't increased ticket prices in the last seven to eight years. Despite mounting losses from underperforming films and rising operational costs like electricity bills, property tax, and water charges, we have consistently kept ticket rates stable to encourage audience footfall."

He further emphasised that the new tax structure would mostly benefit film producers and distributors, not exhibitors.

While the tax reduction is seen as a boost to the filmmaking ecosystem, the immediate impact on audiences, especially in terms of ticket pricing, appears limited. Still, industry stakeholders remain optimistic that the overall move will rejuvenate the Tamil film economy in the long run.

--IANS

aal/svn