Will scrapping 3 percent tax on movie tickets invigorate local cinema?

Following the government’s decision to scrap its 3 percent charge on movie tickets starting next year, concerns have been raised about whether such a discount would actually lead to more people going to the cinema.

According to the Ministry of Culture, Sports and Tourism, about 420 to 450 won ($0.30) will be reduced from movie tickets priced at around 15,000 won, in an effort to “lessen the burden on people who visit movie theaters.” The ministry plans to push for such details to be included in a revised law and implement it starting from January next year.

Since 2007, the government has been levying a 3 percent tax to be used for the local film industry development fund. The ministry plans to replace that from the government budget.

The entertainment industry has consistently called for the government to help lower the price of movie tickets amid sluggish sales, first brought on by the COVID-19 pandemic.

According to data from the Korean Film Council, there were 125 million visits to movie theaters here last year. This is about 55 percent of the pre-pandemic figure from 2019. Sales of movie tickets last year stood at about 65 percent of that for 2019.

Whether the discount in ticket prices will lead to more people going to the theaters remains questionable.

Especially at a time when people more watch content at home through streaming platforms, a night out at the movies for two people with popcorn and drinks could set the moviegoers back some 40,000 won – still pricey even after a discount of a few hundred won.

The ministry said the discount on ticket prices has not been fixed, as it needs to be discussed with cinema operators.

Other concerns stemming from the proposed elimination of the 3 percent charge include the already meager development funds for the local film industry.

According to ministry data, about 54.6 billion won was collected through the 3 percent charge on movie tickets in 2019, but the amount is expected to drop dramatically to 29.4 billion won this year, as fewer people go to the movies.

The ministry reiterated its position Thursday through a press release that it will use monetary support from the government to make up for the suspension of the 3 percent levy from movie tickets.

“As movies play a pivotal role in the development of Korean content globally, the ministry will continue to maintain the development funds for the film industry and discuss with the monetary authorities ways to support the local cinema business,” the ministry said.