Heavy entertainment tax worries Farah Khan

Filmmaker Farah Khan has said the government taking nearly half of the money as entertainment tax, has become a huge burden on the industry.

“Bollywood is going through a really tough time. The kind of taxes that are put on a Bollywood movie is crazy… Hollywood movies come here but their taxation is half of ours. They are not taxed as we are” Farah said.

The ‘Happy New Year’ director also said the rise in cost-of-production has come at a time when people prefer to watch movies on their phones – which she said is going to be the future.

“It has become very expensive to make a movie and now everyone wants to watch on phone. That’s going to be the future. Also, half of the money the government takes, so it is becoming difficult..”

“It doesn’t scare me but they (government) have to figure out a way to control it. It’s the budget that’s wrong, especially the small budget movie that you have to worry about” Farah added.

While regional films get tax benefits in their home states, the Hindi Film Industry is struggling due to entertainment taxes. Governments in Rajasthan and Delhi have recently increased entertainment taxes, which has taken the average all-India tax rate to as high as 40%.

However, the introduction of GST (Goods and Service Tax) is likely to bring down the all-India entertainment tax down to somewhere around 18-22%, which could prove to be the boost the industry needs at this point in time.