Repeal entertainment tax for now, theme park operators say

Govt urged to abolish hefty tax on entrance tickets to attract local visitors as operators report massive losses


THERE is no better time to repeal the 25% entertainment tax than now, in order to support the theme parks business after more than three months of inactivity due to the Covid-19 pandemic.

Local theme park operators urged the government to reconsider the hefty tax imposed on entrance tickets, making visits to these establishments more expensive.

Sunway Theme Parks ED Calvin Ho said local theme parks including Sunway Lagoon have been suffering with no revenue since March 18, 2020, when the Movement Control Order (MCO) was first imposed.

“Operating theme parks are not cheap, on top of spiralling management costs, we have been among the worst hit during this pandemic, way before MCO was imposed.

“We have not only been requesting the government to allow theme parks, both wet and dry, to resume operations, but also to do away or at least reclassify the entertainment tax,” he told The Malaysian Reserve (TMR).

The 25% tax falls under the Entertainments Duty Act 1953, originally introduced in theme parks that had entertainment zones such as gambling, sports betting and nightclubs, where people forked out a lot of money.

Ho said Sunway Group manages the country’s most popular wet and dry theme parks in Selangor and Ipoh, which are family-oriented zones.

“We attract such a large number of both international and local tourists every year, which in turn contributes well to the country’s tourism sector, so why not make it easier for us?

“Especially this year, when all theme park operators in the country are suffering massive losses.

To recuperate and attract local visitors, tickets would have to be affordable.”

Ho stressed that the tax is imposed in the entrance fee, which in turn would be 25% extra on top of the ticket price, making most entrance tickets expensive.

“This is on top of several others such as the corporate tax that theme park operators would have to bear.

“It is considered a ‘write-off’ year for theme parks everywhere and to make most of the remaining months, we would have to be sustainable and affordable for locals who are mostly impacted economically by the pandemic.”

Sunway Theme Parks have been a destination for many international tourists with 50% of its visitors comprising foreigners from the Middle East, India and other Asian countries.

In total, Sunway Lagoon and Sunway’s Lost World of Tambun attract more than 1.5 million visitors each year.

Echoing Ho’s opinion, Malaysian Association of Amusement Theme Park and Family Attractions (MAAFTA) president Tan Sri Richard Koh opines the government should follow the steps of neighbouring countries which have abolished such taxes.

“In our neighbouring countries, the entertainment tax has been exempted for theme parks and family attractions to boost tourism as the revenue earner for the country.

“Even before the pandemic, we have been appealing to the government to hopefully be kind enough to give the poorer families the ability to afford going to theme parks,” he told TMR.

Koh said as industry players are still required to pay corporate income tax, an additional 25% discourages growth and further investments in new technologies and attractions.

He said Covid-19 has caused local theme parks to suffer more than RM40 million in terms of revenue lost and the figure would only get bigger.

Predicting stringent standard operating procedures (SOPs), most theme park operators said they are ready to fully comply if operations can be resumed. The government had announced that theme parks can fully resume its business on July 1.

While the resumption spells good news for operators, Koh believes that the costs of restructuring, staff reduction and termination of contract staff and part-timers are running into approximately RM48 million of losses for the industry in the last three months. “This would go on if we were still not allowed to reopen.”

Koh highlighted that theme parks like Shanghai Disneyland Park and Siam Amazing Parks that recently reopened have successfully operated with meter-long queues and social distancing between family grouping and other guests.

“From what I have learned, all guests were very cooperative, understanding and orderly. “With advanced technology, theme parks here have introduced e-payment and other solutions like online reservations that could remove the queuing process entirely.” Koh said theme park players in Malaysia have developed excellent digital infrastructure even prior to Covid-19.

“For that, we thank the government for providing tax incentives and interest-free loans to speed up digital transformation through Malaysia Digital Economy Corp solutions to encourage digital systems such as virtual queuing for attractions, rides and restaurants at all levels.”

However, it would be inevitable for daily ticket sales to be lower due to the loss of foreign tourists, Koh said.

“Even domestic tourism will take time to pick-up. Although the opening of interstate travel could trigger a demand at local theme parks and attractions, theme park operators will still stand to lose 60% to 80% of the forecast revenue with year-end school holidays reduced to only two weeks.”

Koh hopes the government can allocate a RM500 million special stimulus package for the theme park industry.

“Due to the long period of closure, our industry will take time to recover. On top of being the first to get hit and the last to recover, we hope the government will provide some assistance.”

Legoland Malaysia Resort GM CS Lim told TMR that the group has been in touch Legoland Malaysia Resort constantly with its loyal customers amid the shutdown, despite severely hit by the pandemic.

“We have been actively engaging our fans on social media by bringing various activities that help foster creativity through play while families are homebound.

“This is part of the broader initiative by the resort’s parent group, Merlin Entertainments Ltd, to bring a touch of Merlin Magic across the world.”

Lim also shared that Legoland has introduced operational changes and new measures that will allow the theme park to maintain the highest level of precaution.

The measures include child-friendly spatial markers and signages, enhanced cleaning regimes throughout the day to disinfect high-frequency touch points including rides, tables and chairs, service counters and bricks, as well as suspending selected rides and activities.

Lim is also expecting a smaller crowd than the previous daily headcount to allow for social distancing.

“While observing the limitation, we will continue our promotional plans and flexible packages to encourage people to visit at their convenience.

“We are also revamping our ticketing policies to give guests more value and more reasons to return to Legoland.”

Lim said Legoland is in the middle of creating an educational virtual school trip to Sea Life Malaysia, which will include video tours of the aquarium, worksheets that children can do at home and a live session with a Sea Life Aquarist.

“As schools cannot go on field trips, we found that they are looking for virtual school trips that are reasonably priced (to) provide their students with a more interactive experience.

“We are also exploring a partnership with an international school to kick off the tours and leverage the pilot programme as a case study when we pitch the tour to other schools around the region.”