Taxes on entertainment and goods and services in Malaysia are holding back the theme park industry, according to the chief executive of the country’s leading park operator.
Chan Hoi Choy, CEO of Shopping Malls and Theme Parks at Sunway Group, told The Malaysian Reserve: “Theme parks are capital-intensive investments where returns on investment typically go through a long gestation period before it breaks even, or becomes profitable.
“In addition to the 25% entertainment tax, there is also the 6% Goods and Services Tax. Altogether, a 31% tax effectively means close to a third of the ticket price is taken off.”
The entertainment tax was originally introduced in 1953 but was only extended to theme parks in 2014. Chan said that the tax had caused Sunway to halt plans to build a theme park at its Sunway Iskandar housing development.
Describing the legislation that introduced it as “archaic”, Chan believes removal of the tax would give operators the financial flexibility needed to create more attractions.
“We are appealing to the government to repeal the entertainment levy and give incentives on corporate tax,” he told the Malaysia Reserve.
“We need to create more destinations to encourage more attractions that will make Malaysia a key destination in Asia.”
Sunway operates Sunway Lagoon in Bandar Sunway, which features more than 90 attractions spread across six parks – Water Park, Amusement Park, Extreme Park, Wildlife Park, Scream Park and its latest attraction, Nickelodeon Lost Lagoon.
The company also runs Sunway Lost World of Tambun in Ipoh, Perak, which includes Lost World Amusement Park, Lost World Water Park, Lost World Tiger Valley, Lost World Petting Zoo, Lost World Tin Valley, Lost World Team Building Park and the Lost World Hot Springs & Spa as well as Lupe’s Adventure.
The number of attractions in Malaysia has nearly doubled in the last five years, as part of Asia’s theme park boom.
Image: Sunway Group.