BANGALORE: Karnataka Film Producers Association (KFPA) has called for a rally on 9 August, protesting the government's decision to reduce entertainment tax from 70 per cent to 40 per cent for non-Kannada films.
The association had also been demanding that the government should extend subsidy to all the Kannada films produced in the state, with the exception of remakes and sex and violence-dominated films.

Though KFPA has asked prominent Kannada actors to participate in the rally, their confirmation is still awaited. Hence, till the time of filing of this report, industry sources were unsure whether the rally would be held or not.

Fresh Kannada films have a benefit of no entertainment tax at all being levied on them, while remakes are taxed at a reduced rate of 30 per cent. A section of the producers would like this 30 per cent entertainment tax also to be waived, while some others would like it to continue.

On an average, Karanataka film industry has been producing 80 to 90 movies annually. But for Karnataka, which has the maximum number of cinema halls in the South, this is not at all a sufficient figure. Also, some producers are often reluctant to release their movies in certain theaters in the state. In such a scenario, theater owners cannot do away with non-Kannada films.

The Karnataka Theater Owners Association (KTOA) has approved the deputy chief minister's decision to bring down the entertainment tax. They would also like the government to re-introduce the service tax of Rs1.50 per ticket, which could be utilised for improving the theatre conditions.

Some industry sources feel that reduction of entertainment tax would improve compliance and the tax collections and make more exhibitors to come forward and declare correct ticket sales figures. But another section feels that lower tax declarations and collections would force the government to reverse its decision to bring down entertainment tax.