NOAB urges govt to the stand by position the newspaper industry

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'Newspaper sales have dropped by two thirds, and income even more'

The Newspaper Owners' Association of Bangladesh (NOAB) has urged the government to firmly uphold the newspaper industry amidst the ongoing coronavirus pandemic.

In a statement issued on Friday, the association said the economy of Bangladesh, like other economies around the world, reaches a standstill due to the pandemic.

And, the crisis in addition has greatly damaged the newspaper industry which is nearly on the verge of collapse.

Many newspapers across the country have stopped publishing and shifted online. Newspapers that decided to continue publishing experienced to adopt serious cost-cutting measures. In order to survive, they experienced to reduce the amount of pages they print, the volume of printing, and coloured pages, in addition to reducing staff and other administrative expenses.

In the age of digital globalization, the newspaper industry has suffered gravely and the pandemic has just managed to get even more severe, the statement said.

"Newspaper sales have dropped by two thirds, and earnings even more. Because of the overall decline in sales, it has become problematic for newspapers to pay the salaries of their employees. Although some are paying half some of the amount, others are struggling to achieve that as well. Despite all of the efforts to reduce costs, survival is becoming extremely challenging."

The statement said, because of such instability, the printing and distribution of all newspapers in Chittagong was at a standstill for a good while.

NOAB has held multiple meetings with Information Minister Hasan Mahmud about the situation through the ongoing pandemic when several proposals were put forward by the newspapers to tackle the crisis. However, the results is not very fruitful thus far. 

Nevertheless, as many other sectors have obtained government support at various levels, NOAB is hopeful that the federal government will also take special initiatives to handle its problems, in line with the statement.

NOAB has always tried to improve awareness about the key state of the newspaper industry to ensure that the federal government pays heed during budget allocations and the formulation of policies.

Like last year, this season too, ahead of the budget, NOAB voiced its concerns regarding taxes, value added tax (VAT), and other issues to the National Board of Revenue (NBR), Ministry of Finance, and the Ministry of Information, however in vain. 

In order to overcome the crisis, NOAB members have met with Finance Minister AHM Mustafa Kamal, Information Minister Hasan Mahmud, and Private Industry and Investment Adviser to the Prime Minister, Salman F Rahman. They have considered the problems with urgency and have given assurances of takin the mandatory initiatives.

Prior to the proposed national budget for 2020-21 fiscal year, a five-point written proposal was submitted to the finance minister where it was emphasized that without government support, it would be practically impossible to survive the current crisis, but there was no positive outcome. However, the Ministry of Information has recently taken steps to pay some arrears.

Demands of NOAB

In 2014, beneath the labour law, the newspaper industry was declared something industry. 

NOAB demanded that due to the dire state of the industry, the corporate tax on newspapers be reduced from 35% to 10%. At the same time, there is also a demand to omit the 15% VAT on the import of newsprint. 

The other demands included reduced amount of the Tax Deducted at Source (TDS) on advertising income from 4% to 2%, and reduction of the advance income tax (AIT) on recycleables to 0% instead of 5%. 

As a service industry, newspapers are without having special benefits and also have to pay a corporate tax of 35%, whereas despite being truly a for-profit sector, the ready-made garment industry's corporate tax stands at 10% to 12%. 

In this year's budget, corporate tax has been reduced by 2.5% for all industries. If so, it was necessary to reduce it to at least 10%-15% for the newspaper industry, NOAB said.

According to the Income Tax Ordinance, TDS ought to be 4% on newspaper advertisement income and AIT 5% on raw materials at source - a complete of 9%. Most newspapers barely have a dividend of 9% on total income. Therefore, NOAB is demanding that TDS be reduced to 2% and AIT to zero. 

Under the Value Added Tax and Supplementary Duty Act, newspapers are categorized as the set of services that are exempt from VAT, yet it must pay 15% VAT. Apart from that, this service industry's raw material is newsprint, which amounts to over fifty percent of the full total cost. NOAB demanded that VAT-free benefits be extended to newsprint imports or no more than 5% be charged as VAT.

In the current crisis, almost every sector has benefitted from incentives and concessions being provided by the federal government, except newspapers and mass media, the statement said. 

In order for this industry to survive, it is extremely essential to eliminate, or at least reduce corporate taxes, AIT, and TDS.

Ninth Wage Board

The statement said the federal government announced the initiative to grant the Ninth Wage Board for the newspaper industry. 

"At a time when newspapers were already going through extremely difficult times, this announcement only worsened its woes. It had been not feasible in any manner and thus it had been not acceptable. Multiple writs are still pending in the High Court in this regard.

"The previous Wage Board too was unrealistic and only a small number of organizations could actually grant it. Even during the past, neither was there any special assistance or grant from the government, nor any significant amenities. Considering that we are in age digital media in the current competitive market, newspapers cannot take the initiative to improve their revenues."

As the owner's opinions are never taken into account, the Wage Board remains limited to salaries and allowances only, which is having a grave impact on the industry, the NOAB said.

"Newspapers have been forced to lessen on essential expenditures because they were unable to handle the impractical financial pressure. You will find a likelihood that the industry will never be able to implement the brand new Wage Board or might award it partially, and which will push it to the verge of closure."

Govt intervention crucial

The survival of the newspaper industry is a matter of grave concern. 

Under the circumstances, NOAB feels that government intervention - stimulus package, incentives, bank loans on easy conditions - are all imperative to save the industry. 

As well, the association attracts the federal government to take immediate steps to pay the large sums of advertisement bills which are long overdue.

"We urge the federal government to resolve the complications linked to duties, VAT, etc. In these difficult times, we also urge all readers, journalists, advertisers, agents and hawkers to take a stand. Your collective cooperation is vital for the survival of the newspaper industry. We appeal to all concerned, like the government, to come forward to safeguard our withering newspaper industry."
Source: https://www.dhakatribune.com

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