Listening to a citizen’s petition, Lahore High Court last Wednesday ordered the Excise and Taxation Department to collect the overdue taxes from cinema houses. It was brought into the court’s attention that the authorities had been practicing negligence and were involved in corruption in terms of tax collection from cinemas.

The court was informed that the government department had been providing tax exemptions to cinema houses without any plausible cause. The petitioner Muhammad Hasnain; through his legal counsel Advocate Usman Khalil, suggested the court that this was due to the prevalent corruption in the department.

A loss to the National Exchequer

The petitioner further pleaded that this was being done in order to facilitate some of the “favourite persons,” and that the practice was resulting in the loss to the national exchequer for at least the last 765 days.

In the light of the arguments and facts presented, Lahore High Court on Wednesday ordered the authorities to collect the due taxes from cinema houses within six weeks.

It is pertinent to mention here that under the Punjab Entertainment Tax Act of 1958, authorities are required to collect daily tax from different entertainment establishments like cinema houses. These taxes come from the cinema tickets, as a flat 20% of the admission charges are meant to go to the government kitty.

Government Aims Tax Relief for Film Industry

The decision of Lahore High Court comes at a time when PTI-led federal and provincial governments aim to provide tax relives to film industry in order to promote the soft image of the country.

The Federal Minister for Information and Broadcasting, Fawad Chaudhry, has stressed on multiple occasions the need to increase cinema screens in the country. Expressing his vision for the propagation of entertainment in the country, the minister on one occasion said, “We have now 127 cinema screens at the moment, and we aim to raise their number to 1,000.”

Tax Relief

On another occasion, the minister said that the local movies could be the best source of highlighting Pakistan’s state narrative in the world. He had promised his efforts to provide tax relief to local movies whereas had also urged local cinema owners to increase the ticket prices for foreign films

Furthermore, the minister had said that the government would impose a tax on foreign films to promote local content.

While the cinemas must be made payable on the taxes due on them, it is to be seen whether the prime minister’s vision of “letting businessman make money” will also translate into tax relieves for cinema houses.