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TV levy causes state of limbo A media briefing held in July with regard to a new tax structure resulted in a meeting with the President at which he gave communications industry representatives an opportunity to discuss this matter. Subsequently, he directed a meeting with the Minister of Media to present their proposals. This meeting was instrumental in understanding the objectives of both parties and to outline a mutually beneficial proposal which needs the consent of the Finance Ministry. Although it has taken a long time to resolve this issue, industry representatives are hopeful of meeting representatives from the treasury and believe that this meeting will yield a positive and conclusive result as the current situation is having an adverse effect on all stakeholders of the representative industries. It is evident that in the absence of an early resolution on the levy, all stakeholders of this industry are facing difficult times. The advertising agencies say many schedules of high value are being withheld by clients resulting in revenue losses for a large number of big and small agencies amounting to millions of rupees. TV stations too are feeling the impact of this situation as they have recorded significantly lower revenues in commercial time despite the enhanced cost of managing their stations which are paying the levy where necessary. The stations have also noted that the charging of the levy for repeat telecasts of movies, etc. is a heavy burden. Some marketing organizations have been compelled to deploy other media options or to remain silent as they are unable to bear the cost of the levy in addition to the cost of air time. Marketers say the levy if applied may cost some brands as much as Rs.5 to 10 million per annum. This situation has resulted in the postponement of the advertising campaigns as well as some new brand introductions. |
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