Newspaper Owners’ Association of Bangladesh has urged the government to firmly stand beside the newspaper industry amid the ongoing coronavirus pandemic.
Following is the full text of a statement Noab issued yesterday:
Like many other economies across the globe, the economy of Bangladesh too, is at a standstill and the crisis has largely affected the newspaper industry and it is nearly on the verge of collapse. Sale of newspapers has plummeted severely, so did the number of advertisements. Many newspapers across the country have stopped publishing and shifted online. As a result, many of the newspapers are unable to maintain the regular payment of their employees. Newspapers that decided to continue publishing have had to adopt cost-cutting techniques in order to keep up by reducing the number of pages, volume of printing, coloured pages, as well as cutting down on other administrative expenses.
In this age of digital globalisation, the newspaper industry suffered gravely and the pandemic just made it all the more severe. Newspaper sales dropped by two third and revenue even more. Due to the overall decline in sales, it has become difficult for the newspapers to pay the salaries of their employees. While some are paying half of the actual amount, others are struggling to do that as well. Despite all the efforts to reduce costs, survival has become extremely challenging. Due to such instability, the printing and distribution of all newspapers in Chattogram was in a hiatus for a good while.
Noab held multiple meetings with the information minister regarding the situation during the ongoing pandemic where several proposals were put forward by the newspapers to tackle the crisis. However, the outcome has not been fruitful. Many other sectors have received government support at various levels. We are hopeful that the government will take special initiatives to address our problems too.
It is to be noted that amidst the crisis, newspaper owners, editors, journalists, agents and hawkers are in discussion amongst themselves to help ease the burden. They have made various demands to the government. Noab has always tried to raise awareness about the crucial state of the newspaper industry so that the government would pay heed during the allocation of budget and formulation of policies.
Like last year, this year too, prior to the budget formulation, Noab voiced out its concerns regarding tax, value added tax, etc. to the National Board of Revenue, Ministry of Finance and Ministry of Information, but in vain. In order to overcome the crisis, members of Noab 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 considered the issues with urgency and assured to take the required initiatives.
Ahead of the proposed national budget for 2020-21, a five-point written proposal was submitted to Finance Minister AHM Mustafa Kamal where it was emphasised that without government support, it would be nearly 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.
In 2014, under the labour law, the newspaper industry was declared a service industry. Noab demanded that due to the dire state of the industry, the corporate tax on newspapers be reduced from 35 percent to 10 percent. At the same time, there was also a demand to omit the 15 percent value added tax (VAT) on the import of newsprint. The other demands included reduction of the Tax at Source (TDS) on advertising revenue from four percent to two percent, and reduction of the advance tax (AIT) on raw materials to zero percent instead of five percent. As a service industry, the newspapers are void of any special benefits and have to pay corporate tax of 35 percent, whereas despite being a for-profit sector, the RMG industry’s corporate tax stands at 10 to 12 percent. In this year’s budget, corporate tax has been reduced by 2.5 percent for all industries. In that case, it was necessary to reduce it to at least 10-15 percent for the newspaper industry.
According to the Income Tax Ordinance, TDS (Tax Deducted at source) should be four percent on newspaper advertisement income and AIT five percent on raw materials at source—a total of 9 percent. Most newspapers barely have a dividend of nine percent of the total income. Therefore, Noab is demanding that TDS be reduced to two percent and AIT to zero. Under the Value Added Tax and Supplementary Duty Act, newspapers fall under the list of services that are exempt from VAT, yet it has to pay 15 percent VAT. Apart from that, this service industry’s raw material is newsprint, which amounts to more than half of the total cost. Noab demanded that VAT-free benefits be imposed on newsprint imports or a maximum of five percent be charged as VAT.
During the current crisis, almost every sector has benefitted from incentives and concessions being provided by the government, save the newspapers and mass media. Such a high amount of VAT should not be imposed on newsprint. In order for this industry to strive, it is extremely necessary to eliminate, or at least reduce the corporate taxes, AIT and TDS. On the other hand, the government announced the initiative to grant the 9th Wage Board for the newspaper industry. At a time when newspapers were already going through extremely difficult moments, such an announcement will only worsen its woes. It was not feasible in any manner and thus it was not acceptable. Multiple writs are still pending with the High Court in this regard.
The previous Wage Board too was unrealistic and only a handful of organisations were able to grant it. Even in the past, neither was there any special assistance or grant from the government, nor any significant amenities. Given that we are in the age of digital media in today’s competitive market, newspapers are unable to take the initiative to increase their revenues.
As the owners’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. Newspapers have been forced to cut back on essential expenditures as they were unable to cope with the impractical financial pressure. There is a possibility that the industry will not be able to implement the new Wage Board or might award it partially, and that will push it to the verge of closure.
The survival of the newspaper industry is a matter of grave concern. In these dire times, we feel that government intervention—stimulus package, incentives, bank loans on easy terms—are all crucial to save this industry. At the same time, we are appealing to the government to take immediate steps to pay the large sums of advertisement bills which are long due.
We urge the government to resolve the complications related 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 essential for the survival of the newspaper industry. We appeal to all concerned, including the government, to come forward to protect our withering newspaper industry.