Entertainment Tax Collection
1. Introduction
Under the powers vested in Parliament by Article 148 of the Constitution for imposing taxes, and the power to delegate such authority to another body by law, the Entertainment Tax Ordinance has delegated legal authority to local authorities to impose and collect an amount equal to a certain percentage of the ticket fee charged for admitting persons to any entertainment held within the local authority area as Entertainment Tax. The Entertainment Tax decided and imposed by a local authority under this ordinance comes into effect from the date approved by the Minister and published in the Gazette.
Note:
I. When separate fees are charged for admission to the place where an entertainment is held and for the entertainment inside, each such charge shall be subject to Entertainment Tax.
II. Even when fees are charged online, electronically, or in any other manner without printed tickets for an entertainment, the Entertainment Tax shall be paid at the rate corresponding to the amount collected.
III. If a fee is charged for entertainment through machines operated by oneself or by others, or through any other activity, such fee shall also be subject to Entertainment Tax.
2. Legal Authority
Entertainment Tax Ordinance, Authority No. 267
3. Fee (Tax)
An amount equal to 10% of the ticket revenue determined by the local authority through a resolution, approved by the Minister, and published in the Gazette.
Note:
I. The collected Entertainment Tax amount shall first be deposited into the Sabha's deposit account.
II. After the entertainment concludes, the remaining stamped printed tickets shall be submitted. The Entertainment Tax related to sold tickets shall be calculated, that amount shall be credited to the Sabha's revenue, the remainder shall be refunded to the organizer, and the total deposited amount shall be reconciled with the deposit account.
4. Procedure to be Followed by the Person Liable to Tax
I. Printed tickets of each value (for every point where fees are charged within the venue where the entertainment is held) shall be submitted to the Administrative Head of the local authority and stamped with their seal. (Along with this request, the quantity of printed tickets of each value must be verified by the original and a copy of the money receipt issued by the owner or manager of the printing press where the tickets were printed, along with a separate certificate issued by them.)
II. An amount equal to 10% of the value of all stamped tickets shall be deposited with the Sabha as Entertainment Tax.
Note: Even a person requesting exemption from Entertainment Tax must deposit the applicable Entertainment Tax amount with the Sabha under this provision.
5. Procedure for Collecting Entertainment Tax
Note:
I. Here, the applicant means, in the case of an entertainment, the owner, organizer, or any agent authorized by them through a written document.
II. It shall be the duty of the Municipal Commissioner/Secretary to make necessary arrangements to prevent misuse of the password introduced by the organizer for stamping electronic tickets.
| Procedure | Time Period | Authority |
|---|---|---|
| Submitting printed tickets of each value ready for issuance to the front office | 3 days before the commencement of the entertainment | Applicant |
| Calculating the Entertainment Tax amount to be collected based on the value of tickets taken over and electronic tickets, and notifying the applicant | At the time of taking over the tickets | Front Office Officer |
| Paying the due Entertainment Tax to the front office | Immediately upon notification of the due amount | Applicant |
| Issuing a receipt and a follow-up number for the collected Entertainment Tax | Immediately upon payment | Front Office Officer |
| Crediting the collected Entertainment Tax to the deposit account, and deploying an office assistant to stamp the printed tickets | Immediately after issuing the receipt | Front Office Officer |
| Stamping the printed tickets and handing them over to the front office | The day after taking over the tickets | Assigned Office Assistant |
| Notifying the applicant to collect the stamped printed tickets | Immediately upon reporting that stamping is completed | Front Office Officer |
| Handing over the stamped tickets to the applicant and obtaining a signature | Immediately upon the applicant's arrival | Front Office Officer |
| To settle the imposed Entertainment Tax or to request a refund of the balance of the collected Entertainment Tax | In the case of an entertainment show, before one month has passed from the date the entertainment concluded | Applicant |
| Issuing a follow-up number to the applicant and referring the request to the Subject Officer | Immediately upon receiving the request | Front Office Officer |
| From the Entertainment Tax collected for the show, paying the value of unsold tickets to the organizer | Within two days from the date the request is made | Subject Officer |
| Making adjustments to the deposit account and the Entertainment Tax revenue head | Within two days from the date the request is made | Subject Officer |
| Collecting the Entertainment Tax and issuing a receipt | Immediately upon pronouncement of the court order | Officer nominated to act under the supervision of the Revenue Inspector |
| Reporting data on collected Entertainment Tax to the Subject Officer and recording the court order in the case file | Same day | Revenue Inspector |
| Recording information on collected Entertainment Tax in the Entertainment Tax register | Within 2 days from receiving the Revenue Inspector's report | Subject Officer |
| In a case where the deposited Entertainment Tax amount cannot be released, notifying the organizer accordingly, requesting and cancelling the unsold tickets along with the sub-document, releasing the corresponding amount to the organizer, transferring the balance in the deposit account to the Entertainment Tax revenue account, and settling the accounts | Within seven days from receiving the order | Subject Officer |