CULTURAL SHOWS (Criteria for tax exemption)

Mr P. Govindaswamy asked the Minister for Finance what are the criteria for tax exemption for cultural shows; arid what yardstick is applied to distinguish charitable shows from private shows.

Mr Hon Sui Sen: Sir, where cultural shows are organised by a charity or an "institution of a public character" or any other non-profit making organisation and where the proceeds are used for charitable, philanthropic, educational or sporting purposes, entertainments duty is not charged. An essential condition is that performers do not receive payment for their services. Details are given in section 12 of the Entertainments Duty Act (Chapter 1 36).

Cultural shows organised by other establishments may also qualify for entertainments duty exemption provided that the funds are used for the same purposes and an endorsement is received from the benefiting organisation.

By private shows, I assume the Member is referring to performances by profit making organisations where the proceeds are not used for charitable, philanthropic, educational or sporting purposes. Entertainments duty exemption is discretionary but will generally be granted where the performance has intrinsic cultural value. It is difficult to spell out precisely what shows are of cultural value, but generally symphonic concerts, chamber music ensembles, operas, ballets, plays and national cultural shows are given exemption. The unduly esoteric or the mundane will not normally qualify for exemption. Other aspects that are taken into consideration are whether the performers are of international status and whether the performance would appeal to a reasonably wide cross section of Singaporeans.

Mr P. Govindaswamy: Sir, I would like the Minister to clarify this point. What is the difference between a show organised by a private individual and that of a charitable organisation? Recently, there have been many shows organised by private individuals for their own benefit, and they were given tax exemption. Why is there discrimination between the cinemas and the National Theatre? If entertainment duty is paid by the cinemas, why is duty not charged for shows organised ,by private individuals at the National Theatre? If a show is organised not for a charitable cause, then entertainment duty should be levied. If the private organisations want to organise shows for their own benefit, entertainment duty must be imposed as for the cinemas. If it is a charitable show, then it should be exempted from tax.

There is a loophole in the law and I hope the Minister will look into this. The Minister should also look into the wording of the relevant law. I have received so many complaints on this that I have to put forward this question. The Minister must stop this.

Mr Hon Sui Sen: Mr Speaker, Sir, I am most disappointed at the Member for his non-support of shows of cultural value. I thought that his question tended the other way. i.e, he wanted to try and press me into giving more exemption for shows of cultural value. If he thinks that the private shows are making too much money. I am quite happy to extend the same exemption to him if he could bring in symphonic concerts, ballets, cultural ensembles, chamber music and so on, which are what we at present give exemption to. I do not think I want to depart from my present practice which is to give exemption for these cultural shows. Of course, if he brings in pop music and so on, I will not exempt them from entertainment duty.

Mr P. Govindaswamy: Sir, the Minister has not heard me correctly. He does not want to change his policy or practice. I accept that. But I do not want to see the proceeds of these shows going into the pockets of individuals. If they are used for charitable purposes, tax exemption should be given. If it is not for a charitable cause, entertainment duty should be charged, as for the cinemas. Otherwise the people will complain. We must try to make this clear and spell it out in the law that if a show is organised by a private individual entertainment duty will be levied. Then there will be no trouble.

Sir, at the time I organised a charitable show there were so many individual organisations. My organisation is a charitable one but these individual organisations have all mixed together -

Mr Speaker: Order. Mr Govindaswamy, could you please put your supplementary question?

There being no response -

Mr Speaker: Since he has no other supplementary question, there is no need for an answer, Mr Hon.