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 across the globe, is at a standstill due to the pandemic.
And, the crisis has also greatly affected 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 have had to adopt severe cost-cutting measures. In order to survive, they have had to reduce the number of pages they print, the volume of printing, and coloured pages, as well as cutting down on staff and other administrative expenses.
In the age of digital globalization, the newspaper industry has suffered gravely and the pandemic has just made it all the more severe, the statement said.
"Newspaper sales have dropped by two thirds, and revenue even more. Due to the overall decline in sales, it has become difficult for newspapers to pay the salaries of their employees. While some are paying half the actual amount, others are struggling to do that as well. Despite all the efforts to reduce costs, survival has become extremely challenging."
The statement said, due to 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 regarding the situation during the ongoing pandemic when several proposals were put forward by the newspapers to tackle the crisis. However, the outcome has not been very fruitful thus far.
Nevertheless, as many other sectors have received government support at various levels, NOAB is hopeful that the government will also take special initiatives to address its problems, according to the statement.
Noab has always tried to raise awareness about the crucial state of the newspaper industry so that the government pays heed during budget allocations and the formulation of policies.
Like last year, this year too, prior to 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, but 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 issues with urgency and have given assurances of takin the required initiatives.
Ahead of 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 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.
Demands of Noab
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% to 10%. At the same time, there was also a demand to omit the 15% VAT on the import of newsprint.
The other demands included reduction of the Tax Deducted at Source (TDS) on advertising revenue from 4% to 2%, and reduction of the advance income tax (AIT) on raw materials to 0% instead of 5%.
As a service industry, newspapers are void of any special benefits and have to pay a corporate tax of 35%, whereas despite being 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. In that case, it was necessary to reduce it to at least 10%-15% for the newspaper industry, Noab said.
According to the Income Tax Ordinance, TDS should be 4% on newspaper advertisement income and AIT 5% on raw materials at source — a total 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 fall under the list of services that are exempt from VAT, yet it has to pay 15% 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 extended to newsprint imports or a maximum of 5% be charged as VAT.
In the current crisis, almost every sector has benefitted from incentives and concessions being provided by the government, except newspapers and mass media, the statement said.
In order for this industry to survive, it is extremely necessary to eliminate, or at least reduce corporate taxes, AIT, and TDS.
Ninth Wage Board
The statement said the 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, such an announcement only worsened its woes. It was not feasible in any manner and thus it was not acceptable. Multiple writs are still pending in the High Court in this regard.
"The previous Wage Board too was unrealistic and only a handful of organizations 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 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 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."
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 terms — are all crucial to save the industry.
At the same time, the association appeals to the government to take immediate steps to pay the large sums of advertisement bills which are long overdue.
"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."