Musicians and gig organisers react to Selangor entertainment tax: “Aren’t the artists struggling already?”

Musicians and gig organisers in the Malaysian state of Selangor have called upon the state government to waive a 15 per cent live entertainment tax that has provoked outcry in recent weeks.

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Under current entertainment tax laws in Selangor, the state government reaps 15 per cent of sales from all ticketed shows featuring local performers and 25 per cent for international performers – even before a ticket is sold. After paying an amount of tax that assumes a sold-out show, once the show is over organisers must then submit ticket receipts to the state treasury to claim refunds.

Earlier this month, artists in Selangor, one of Malaysia’s most populous states, voiced strong opposition to the tax, which Selangor Chief Minister Amirudin Shari said in December the state government would begin to enforce. Since the backlash, which also came from comedians such as Dr Jason Leong and Kavin Jay, the state government has announced that it will review the tax.

Independent musicians and DIY gig promoters who spoke to NME were critical of the tax, which they said would further eat into the little profit that concerts and performances generate, and would add insult to injury for an industry still struggling to rebound from the pandemic.

“If the government wants to start enforcing such taxes, they should first focus on reworking the foundation first,” said Ze, frontman of punk rockers Spooky Wet Dreams. Ze – real name Shazwan Zulkiffli – has also organised shows with Hujan, OAG, Sekumpulan Orang Gila, and American pop-metalcore band Issues as part of the collective Revofev.

Grants like those disbursed by CENDANA, Malaysia’s non-profit body dedicated to uplifting the arts, “can be beneficial”, Ze said, “but in the long run, the state government needs to help reconstruct the whole entertainment ecosystem. I’m talking about empowering entertainment venues, record stores, homegrown labels. Make sure they get the support they need.”

“Performers don’t make much at all and organisers barely make anything at all,” Darren Teh, who has organised numerous DIY shows in Selangor for upcoming local bands and touring acts like The Sam Willows and Against The Current, told NME.

“A lot of shows that happen on the grassroots level happen because artists want to make it happen. They want to showcase their music and their art. To charge a fee on top of their art even before they can showcase it is just complete BS,” said Teh, who also fronts the band An Honest Mistake.

“Aren’t the artists struggling already? Where is the appreciation and support for arts? The hardest hit industry until now which still hasn’t recovered is the arts and nightlife. It’s like the [government] sees you bleeding, takes a chainsaw and cut[s] you further.”

The tax has been in place since 1953, though many arts practitioners have claimed it has not been widely or consistently collected.

The latest furore began when Minister Amirudin addressed the state legislature in December, claiming that the state had lost more than MYR50million in taxes since deciding to waive entertainment tax for 2021, prefacing the state government’s intent to start clawing back some of this lost revenue.

The minister had previously said the tax would help local artists “improv[e] productivity, quality and competitiveness to be better than foreign artists,’’ emphasising that the tax rate for local performers had been reduced to 15 per cent from 25.

In response, Fuad Alhabshi of Kuala Lumpur- and Selangor-based rock band Kyoto Protocol argued: “RM50 million would have only represented around 2 per cent of Selangor’s 2022 budget (of RM2.34billion). Yes, I know the state is in a deficit, and that means that revenue needs to be found somewhere. But how about rationalising the costs? 52 per cent of the budget goes towards administrative expenses alone.

“Not to mention that the state’s corruption scandals easily dwarf this amount. What’s the use of implementing a tax when the businesses may not survive and therefore will be unable to pay those taxes?”

While the state government may see some profit from the tax should it be collected, Teh thinks there may be unforeseen and undesirable effects: “The long term effect is that organisers will resort to other means to evade the ‘tax’ and will eventually put on shows that are then considered ‘illegal’. Either our artists become cult favourites or there’ll be a halt to our creativity.”

One prominent artist criticising the tax was rapper-turned-politician Altimet who on March 14 called for the live entertainment industry to move out of Selangor if they couldn’t “make the numbers work to hold events”.

As much as I am an Anak Selangor, I think the entertainment industry should move their activities to another state if they can’t reach an accord with state govt, and if they can’t make the numbers work to hold events. Nothing personal, it’s business.

— Altimet.eth (@altimet) March 14, 2022

Teh says that business fleeing the state may be inevitable if the tax is enforced: “The more deprived we are forced to become, the more we will focus less on Selangor itself.

“More events have been happening up in Ipoh and Penang and down in Melaka and Johor while Selangor is still in limbo.”

Ze, however, says: “As artists, we can’t abandon fans from Selangor.” He instead urged the state government to view the pandemic as an opportunity “to reboot the ecosystem”, saying, “If there’s a time when we need the government to come in and support us, it is right now.”

According to The Vibes, the government review of the tax may result in its reduction to 5 per cent for shows with local performers (down from 15 per cent) or a complete waiver for the rest of 2022. However, the 25 per cent rate for shows with international performers is expected to remain.

Minister Amirudin said a decision will be made by this Friday (April 1).

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