Local newspapers will suffer a fall in circulation amid an unstable revenue flow due to new VAT policy that requires the print media to pay 15 percent VAT on the advertisement revenue within 45 days of submitting bills to the advertisers.
Though many advertisers don’t pay the advertising bills at all and most others take six to 12 months to clear their payments, the newspaper owners will have to pay the VAT in 45 days once the new VAT is comes into effect from July 1.
Journalism teachers of various universities expressed their concern over the new VAT policy for the print media, saying that the new VAT regime will disrupt the free flow of information through the print media.
Professor Golam Rahman, professor of Mass Communication & Journalism at Dhaka University, said “The newspaper industry is a weak sector from various aspects. This sector deserves financial and policy support. Any kind of new pressure is a matter of disappointment for this industry.”
He also said that the VAT burden both on newsprint import and advertisement bills will certainly increase the cost of publication.“The prices of newspapers will shoot up automatically while the circulation will decline,” Prof Golam Rahman said.
He also informed that the newspaper industry enjoys special facilities and lower tax rates around the world, adding that the government should take notice of this issue to help this sector survive.
“Newspaper is only a product but also a tool for flourishing the society. If the print media faces any difficulties, the flow of information flow will be hampered,” he observed.
Robaet Ferdous, associate professor of Mass Communication & Journalism at Dhaka University, said newspaper industry has already been under mounting pressure with the rise of television and online media. Against this reality, any kind of new financial pressure will severely affect the newspaper industry.
He also said the new VAT policy on newspaper advertising will put a negative impact on the flow of advertisements to the newspaper. The flow of advertisement has been decreasing gradually and the e-tendering system shrank the size of newspaper advertisements.
“Under these circumstances, the new VAT policy will be a threat to the century-old newspaper industry. It will hit the newspaper circulation and cost of publication,” he said.
Robaet Ferdous also observed that the government to resolve the issue in Parliament.
Abul Kalam Azad, chairman of Communication and Journalism Department at Chittagong University, said that newspaper industry is a pro-people industry and it’s the voice of the people. “So this sector should not be treated like every other sector,” he said.
Sheikh Adnan Fahad, assistant professor of the Department of Journalism and Media Studies at Jahangirnagar University, said the new VAT policy might be hard to cope with for many newspapers.
Under the Value Added Tax and Supplementary Duty Act, 2012, to be enforced from July 1, the government will collect VAT from the newspapers instead of the advertisers. If they fail to realise the bills, they will have to count the losses.