Survival the main challenge now: NOAB
Newspaper owners are demanding bank loans, a government stimulus package and policy support to offset Covid-19’s shocks
The Newspaper Owners' Association of Bangladesh (NOAB) said surviving the virus crisis has become the main challenge for the newspaper industry amid the novel coronavirus' fallout.
Against the backdrop of Covid-19's onslaught, the owners, Friday, in a media statement demanded incentives, bank loans on easy terms and a stimulus package from the government.
Additionally, the association asked the government to take immediate action to pay the bills of government supplements and advertisements published in newspapers.
NOAB said the sale of newspapers and the amount of advertisements have plummeted severely during the pandemic. Many newspapers across the country have stopped publishing and shifted online.
Therefore, newspaper outlets are unable to maintain the regular payment of their employees. Newspapers that decided to continue publishing have had to adopt cost-cutting mechanisms to keep up; like reducing the number of pages, volume of printing and number of coloured pages as well as cut down on other administrative expenses, said the statement.
The newspaper industry was already suffering before the pandemic, owing to digitisation and globalisation, and the pandemic has deteriorated the situation.
NOAB 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 staff's salaries. While some are paying half of the actual amount, others are struggling to do so."
"Despite all the efforts to reduce costs, survival has become extremely challenging," it added.
Citing the printing and distribution suspension of a number of newspapers in the port city of Chattogram, for days, the statement noted that the owners met government high-ups including the information minister several times to push forward their demands.
Like in previous years, NOAB voiced its concerns over several taxes to the National Board of Revenue, Ministry of Finance and Ministry of Information, prior to the budget, but in vain.
In 2014, the newspaper industry was declared a service industry under the Labour Law.
Due to the dire state of the industry, NOAB demanded the corporate tax on newspapers be reduced to 10 percent from the existing 35 percent. It also sought the 15 percent value added tax (VAT) be omitted on newsprint imports.
The other demands included a reduction of the tax deducted at source (TDS) on advertising revenue from four percent to two percent, and reduction of the advance income tax (AIT) on raw materials to zero percent instead of five percent.
"In this year's budget, corporate tax has been reduced by 2.5 percent for all industries. In that case, it is necessary to reduce it to at least 10-15 percent for the newspaper industry," said NOAB in the statement.
According to the Income Tax Ordinance, TDS should be four percent on newspaper advertisement income and AIT five percent on raw materials at source — a total of nine 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 VAT be charged.
NOAB also urged readers, journalists, advertisers, agents, and hawkers to support them during the virus' fallout.