Financial Times - Thumbs up for chaos, confusion

Television channels ran ‘crawlers’ (one-line advisories across the screen) during foreign programmes saying it cost them a levy of Rs 75,000 to Rs 150,000 to show that programme while some stations apologised for cutting programming due to an exorbitant tax.

Elsewhere the Colombo Port ground to a halt with striking workers demanding more wages and rejecting claims by Ports Minister Mangala Samaraweera that some workers earn Rs 100,000 or more! Strikers have virtually brought the economy to a halt upsetting the schedules of tea and garment exports, the two main earners for the country. Industry has warned of a major crisis with ships avoiding Colombo.

On the war front, thankfully there has been a lull in the violence for unknown reasons – thus giving the government a breather as it tackles fresh problems in an economy that is already taxed heavily by rising oil prices.

The reasons behind the TV tax on foreign commercial films, dramas and foreign commercials was mainly due to the adverse impact on the local film industry through the proliferation of Hindu and Tamil movies and dramas that are more popular that the Sinhala movies, thus getting larger audiences, bigger advertising and taking prime time space. The move badly hit TV channels like ETV and ART that show only English movies and are unable to compete with the likes of MTV/Sirasa or Swarnavahini in terms of advertising revenue.

Foreign commercials are also taxed. The worst part however is the confusion in the taxation process. Many issues are unclear like for example is there a selective taxation where good quality and socially acceptable (for local audiences) foreign movies would be exempt from the tax or is the tax already in force?

MTV for example ran crawlers during foreign movies, comedies or dramas saying the channel had paid the levy. But who is doing the collecting? On the other hand is this a kind of censorship as the UNP claims? In a way it looks like one given the kind of decisions made by the authorities in recent times – all affecting the media.

The 2005 budget for example had a clause where the corporate sector could claim only 50 percent of its advertising spend as an expense – instead of 100 percent earlier – which saw advertising revenues in the media falling soon after as the private sector weighed its options. That situation has however improved with some negotiation.

Then a few months ago, the government stopped two cable TV stations ostensibly for using the wrong license to air programmes – several months after these channels were on air. It’s hard to believe that the Media Ministry didn’t spot it earlier when the license was given in the first place or were they plain inefficient? Or was it a political move to help another favoured station?

It looked almost hilarious – if not for the seriousness of the situation – when a new satellite TV channel was launched two weeks back promising a whole range of programming, while the government on the other side was squeezing existing ones. What’s wrong with government policy? Why all this confusion and repressive conduct?

And here’s now the infamous TV tax on foreign movies and commercials. Wasn’t there better ways of protecting local artistes – perhaps by discussion with television authorities – instead of arbitrary moves?

TV channels should also share some part of the blame for waiting for so long – almost nine months after last November’s budget – to raise this issue. There was also no unity in the protest action.

The Port strike is the worst in recent years, according to industry observers who say there hasn’t been a strike of this magnitude – even during the JVP insurgency in 1988-90 or anytime during 24 years of the LTTE insurrection.

However, on Friday the strike was called off. Nevertheless the events in recent days show the inefficiencies of an administration which on one side has created a complicated tax structure (read more about it next week in The Sunday Times FT) and on the other, unable to end a crippling strike early – even though workers may be at fault.

And another thought on confusion: President Mahinda Rajapaksa promises a group of former test cricketers that a new interim committee would replace the existing one. The following day the Sports Minister says the current committee will remain; the cricketers return to the president who says his minister would have been misinformed.

A week has passed and the status quo remains – an example of the chaos and confusion that reigns in the leadership.