Philippine news industry seeks tax break amid pandemic

MANILA, Philippines — The Philippine newspaper and print industry, considered as one of the vanguards of democracy and a major pillar in nation-building, is seeking government support to keep players afloat amid the increasing cost of paper and ink, a steady rise in inflation and the negative impact of COVID-19 on the economy.

In a position paper, the United Print Media Group (UPMG) Philippines, a 20-year-old association composed of publishing companies producing major newspapers, tabloids, magazines and books in the country, urged legislators to craft a better version of the pending Creative Industries Bill in Congress.

The industry is asking to be exempted from value-added tax (VAT) on the purchase of paper and ink and on the sale of advertising services, a reduction in income tax and government support to institutionalize current affairs in students’ curriculum.

UPMG believes that a VAT exemption on the sale of paper and ink, the two main materials used by print media publishers, and the sale of advertising services for publications will help the industry remain viable.

“We believe that being able to address both the cost aspect and revenue aspect of print media publication will allow the industry to not just survive but even thrive in today’s fast-changing world,” it said.

UPMG believes that the removal of the 12 percent VAT on the sale of paper and ink would greatly lessen the cost of publication, which would translate to higher savings for print media publishers. These savings could be used further to improve the quality of their publication through upgrading of equipment and better compensation for employees, among others.

It also noted that the market size of newspaper advertising in 2018 was at 3.6 percent and forecast to suffer a -7.7 percent growth. As for its share in the total advertising market, newspaper advertising only took up 5.8 percent in 2018, having steadily decreased its share from 2012.

Reduced income tax

Print media players are also asking for a reduced income tax and tax assistance package, especially in the light of the COVID-19 pandemic.

It proposed that the current regular Corporate Income Tax of 25 percent be reduced to 15 percent for the print media industry, noting that under the CREATE law, the non-profit proprietary educational institutions and hospitals – another crucial sector of the country – enjoy a one percent corporate income tax.

“Shouldn’t the print media industry, an industry devoted to bringing news and information, of spreading the truth, of forming a nation composed of informed citizenry, be entitled to the same benefit of lowered income tax? Just like educational institutions, the print media serves as a vehicle for education,” UPMG said.

It stressed that the need for government support amid COVID-19 could best be demonstrated by the fact that 13 community newspapers suspended print operations just to prevent further losses.

In seeking government support, the UPMG cited newspapers in the US that have also experienced major losses due to the pandemic. The US Congress aims to help through the Local Journalism Sustainability Act, a bill that would provide tax credits for news consumers, print media publishers and advertisers.

If enacted, it will provide non-refundable tax credit for subscribers, refundable tax credit of up to $25,000 for local newspapers, and non-refundable tax credit for small to medium-sized businesses to advertise with local newspapers.

The move in the US is also being replicated in other countries such as Canada and France.

“While various governments around the globe are doing their best to help their own print media industry, media organizations, particularly the print media in the Philippines do not enjoy the same level of support and aid from our very own government,” UPMG said.

Aside from VAT exemption and tax cut, the group is also seeking an institutionalized partnership with the Department of Education and the Commission on Higher Education to have a separate and distinct news and current affairs subject as part of the curriculum.

It stressed the importance of enabling students to be knowledgeable of news and current events in the country.

UPMG also underscored the important role of print media in information dissemination and teaching the value of reading and education through tactile forms such as books, magazines and newspapers.

‘We cannot do it alone’

In appealing for government support, the UPMG said: “Even if the price of paper and ink continues to soar, we continue to deliver our stories, we strive to deliver relevant news in a timely manner. Even if typhoons rage, our writers and reporters are there to cover the story and inform the public. And even if our own employees get infected with COVID-19, life in print media goes on.”

“We in the print media industry risk our lives for every news that we publish. Our writers, reporters, and photographers endure long hours of travel, lack of sleep, rain, even gunfire, and now COVID-19 just to bring news to the people,” it added.

In all, the group said it hopes to see the industry not just survive, but thrive and grow. “But we cannot do it alone,” UPMG said.