Legislature Preliminarily Approves Entertainment Tax Law Amendment: Movies, Performances, Concerts Exempt from Tax

Central News Agency (Reporter Wang Cheng-chung, Taipei, April 15) – The Legislative Yuan's Finance Committee today preliminarily approved a draft amendment to parts of the "Entertainment Tax Act," eliminating entertainment taxes on movies, professional singing, storytelling, dancing, circuses, magic shows, acrobatic performances, nightclubs, dramas, musical performances, non-professional singing and dancing, and various sports competitions.

To encourage public participation in arts and cultural activities and sports competitions, and to balance the financial autonomy of local governments, the Executive Yuan Council in September 2024 passed a draft amendment to parts of the "Entertainment Tax Act" prepared by the Ministry of Finance. This draft will be submitted to the Legislative Yuan for deliberation, authorizing local governments to suspend entertainment taxes on arts and cultural activities and sports competitions, depending on industrial development, policy needs, and financial conditions.

Today, the Legislative Yuan's Finance Committee scheduled the review of the draft amendment to parts of the tax law submitted by the Executive Yuan, as well as similar proposals from both ruling and opposition legislators. Minister of Finance Chuang Tsui-yun and others were invited to attend.

The current Entertainment Tax Act stipulates that tickets or fees for movies, professional singing, storytelling, dancing, circuses, magic shows, acrobatic performances, nightclubs, dramas, musical performances, non-professional singing and dancing, various sports competitions, dance halls or ballrooms, golf courses, and other entertainment venues, facilities, or activities are subject to entertainment tax.

Specifically, the tax rate for movies may not exceed 60%; for professional singing, storytelling, dancing, circuses, magic shows, acrobatic performances, and nightclubs, it may not exceed 30%; for dramas, musical performances, non-professional singing and dancing, it may not exceed 5%; for various sports competitions, it may not exceed 10%; for dance halls or ballrooms, it may not exceed 100%; and for golf courses, it may not exceed 20%.

Legislators from both the ruling and opposition parties present agreed that the unreasonable entertainment tax should be abolished. Democratic Progressive Party legislator Kuo Kuo-wen stated that the Ministry of Finance has always managed legitimate leisure activities as special businesses, lacking theoretical basis. Last year, local government revenues were NT$1.0275 trillion, with entertainment tax accounting for NT$2.25 billion, only 0.2%. After the amendment to the Act Governing the Allocation of Government Revenues and Expenditures, the increase in local shared tax revenues can fully compensate for the tax loss from abolishing the entertainment tax.

Kuomintang legislator Lai Shyh-bao pointed out that the entertainment tax was enacted in 1942. Now the government is issuing cultural and sports vouchers to promote public support for the arts, cultural, and leisure industries, yet simultaneously levying entertainment tax, which is strange. The annual revenue from entertainment tax is only over NT$2 billion, not a large amount. If abolished, it would be simple for the central government to subsidize local governments. He hoped the Ministry of Finance would comply.

Ultimately, ruling and opposition legislators and administrative departments including the Ministry of Finance reached a consensus, preliminarily approving the draft amendment to parts of the Entertainment Tax Act, eliminating entertainment taxes on movies, professional singing, storytelling, dancing, circuses, magic shows, acrobatic performances, nightclubs, dramas, musical performances, non-professional singing and dancing, and various sports competitions.

However, dance halls or ballrooms, golf courses, and other entertainment venues, facilities, or activities announced by the Ministry of Finance as providing entertainment will still be subject to entertainment tax. An additional provision was added, allowing local governments to suspend entertainment taxes on the aforementioned taxable items as needed, subject to approval by the local council and reporting to the Ministry of Finance for record.

Furthermore, the preliminarily approved article also reduces the entertainment tax rate for dance halls or ballrooms from the current maximum of 100% to a maximum of 50%; golf courses remain unchanged, while the tax rate for other entertainment venues, facilities, or activities announced by the Ministry of Finance as providing entertainment will be a maximum of 25%. (Editor: Zhai Sijia) 1150415