Bailing out Radio Pakistan

Published: March 3, 2012

Is Radio tax really necessary?

In his letter to the editor of The Express Tribune on February 28, Radio Pakistan Director General Murtaza Solangi defended the proposed tax of 2% on mobile phone users on every recharge to make public radio financially stable. If the additional tax was unacceptable, Solangi said, people should come up with counter-proposals for Radio Pakistan to stay afloat.

Solangi says:

“At the end of the day, the choice is either to have a public broadcaster — as the rest of the world does — or shut it down. If it needs to be retained, then people need to tell us how.”

First off, the reasoning implied in his letter that all over the world public radio is heavily subsidised by the state is questionable. Moreover, the fact that the annual wage bill of Radio Pakistan is double the total volume of radio advertising revenue should prompt immediate belt-tightening at the national institution.

In any case, resorting to indirect taxation when the tax-to-GDP ratio in Pakistan is already below 9% is simply unjust. Instead of punishing phone users, who’re already subject to various indirect taxes, shouldn’t the untaxed sections of the economy be brought under the tax net to generate more revenues?  Take the example of the retail sector. According to former finance minister Shaukat Tarin, retailers across the country pay taxes amounting to roughly Rs125 million annually, of which Rs50 million are paid by the Canteen Stores Department. This figure is shockingly low because the size of the retail sector in Pakistan is estimated to be $42 billion.

One of the many reasons for the government’s dismal tax collection from the retail sector is that it mainly consists of small players. Income tax can’t obviously be collected from small retailers. To capitalise on the large and thriving retail sector, the government should expedite the process of bringing global retail giants like Walmart to Pakistan.

Even if large retailers were to take only one-tenth of Pakistan’s retail sector, it would generate tax revenues of well over $1.4 billion a year. Compare it to the current annual figure of Rs125 million, and we know why direct taxation and big corporations are key to effective tax collection.

With its passionate request for government help, Radio Pakistan has joined loss-making, state-owned organisations like PIA and Pakistan Steel Mills, which are already costing the national exchequer roughly Rs400 billion annually.

A national asset becomes a liability when it seeks a bailout at the expense of taxpayers.

 

Read more by Kazim here.


Kazim.Alam

Kazim Alam

The writer is a business reporter for The Express Tribune.

The views expressed by the writer and the reader comments do not necessarily reflect the views and policies of The Express Tribune.

  • awais

    Its amazing that they tax for PTV in electricity bills and PTV still shows a lot of advertisements in air time. If private channels can run on commercials alone with a much smaller audience then the terrestrial public sector media outlets why cant PTV and radio Pakistan? My advice is to take away green number plate vehicles and other perks from MDs and other high ranking officers if they take them from tax moneyRecommend

  • http://pakistani-edu.blogspot.com Usman Shahid

    Agreed with awaisRecommend

  • questioner

    Church our how national public radio inn us rings over public donations!Recommend

  • http://www.zaidzamanhamid.wordpress.com zaid hamid

    It is tine for Radio Pakistan Delhi so better that Radio Pakistan survives.Recommend

  • Faria Syed

    We ran this link text story today.

    Recommend

  • Muhammad Karim Ahmed

    Radio Pakistan is a national institution which serves the nation and state ideology. it is not a commercial entity whose prime function is to earn money. All over the world state radio is run on state exchequer.if radio Pakistan needs govt. assistance to overcome its financial problem, it must be met.some people compare it with PIA and Railways and are opposed to any subsidy for radio pakistan.PIA and Railways generate revenue through passengers and goods transfer.radio has no such facility.
    Radio is a national institution which always stood by nation in war and at the time of natural calamity or earthquake.In the remote and far flung areas of pakistan, radio is source of information and entertainment.defense personnel deployed at siachin and forward bases, remain in touch with their family through radio pakistan.
    in my opinion, the proposal of radio license fee revival is positive and should be supported.Recommend

  • faddy

    easy solution:

    take away BMW , LANDCRUSERS and MERCEDES from all the government officers / ministers and their PETROL limit shunned off. Nothing above TOYOTA XLI should be given to them that runs on CNG. When in Britain there can be an uproar on Royal Spending which indeed they curtailed it, so why not in Pakistan. Its our tax money that they are misusing and because of this we end up paying additional taxes and still living without basic amenities of life.

    also they should study the business model adopted by private FM radio channels , learn how
    to self sustain and be in profits without begging to public at large. Get advertisement and other similar sources of income !Recommend

  • Critic

    Radio Pakistan….

    I heard it somewhere…Yup.according to Zaid Hamid,it will soon be broadcasted from New Delhi,right….

    Hope they put air less ads…I’m fed up of the constant ads by Radio City,Red FM than others….Recommend

  • masood ahmad zubair

    People particularly political parties should not criticize the proposal given by director general radio Pakistan murtaza solangi to impose 2% radio tax on mobile card users in order to save this ideological institution from further degradation.it is very meager amount for the masses of pakistan to counter the problem. radio Pakistan is a state run organization we can,t expect earning from this organization as it is serving for national cause.we should not compare it with organizations like PIA,WAPDA AND RAILWAY,because it has not lot of avenues of revenues generation , all the mentioned institutions are incurring loses on account of embezzlement and corruption on large scale,while radio pakistan is at least free from corruption.people should come up with alternate solutions rather criticizing this valuable proposal .Recommend

  • Saad Feroz

    In my opinion, the following arguments for the proposed subsidy to save radio Pakistan hold true:
    1. It is a National Institution like no other in Pakistan.
    2. Pakistan is one of the few countries of the world where cellular communication is still very cheap, not to mention things that we take for granted like free incoming calls, which are also charged at a base rate in some developed countries.

    However the efficiency of Radio Pakistan needs to be kept under check. In this regard perhaps it would be better idea to privatise part of Radio Pakistan possibly to the telecom operators in Pakistan. I am not saying that privatization is the best and only option, but at the least it brings with its accountability and transparency, things which are much needed within this institution. And what of the employees, GM’s and directors of Radio Pakistan? They need to play their due part. In this regard an option can be an employee buy out whereby employees buy out a certain number of shares in radio Pakistan on a mandatory basis based on their seniority level. This strategy would have efficiency built into it when the success of an Institution is linked to the success of its stakeholders. Rest assured, the directors and employees will cry out on even the slightest hint of this suggestion even though civilians may accept the tax on mobile cards quietly……Equity of the decision is called into question here……Recommend

  • http://tribune.com.pk/story/10455/bailing-out-radio-pakistan/ Meesaq Husain Zaidi

    Radio Pakistan management is responsible for the financial collapse of once great institution – Radio Pakistan. The main reason being :

    Since 1971 Radio Pakistan was stuffed with political appointees in all cadres.
    The present head of Radio Pakistan is a near friend of our dear President Asif Ali Zardari. Mr Solangi served him while Zardari was living in America. Obviously, top to bottom employees have been inducted on political consideration.
    Radio Pakistan is over-staffed.

    .4.There was no need to establish Radio stations in small towns. All these stations have been established to generate jobs for locals on the recomendations of influentials. All these Radio Stations established from 1971 – 2012 may be closed.

    5.Provincial ministries of culture , Agriculture, Local Bodiesand education etc may be forced to contribute/allocate reasonable budget for projecting their responsiblities and assisting them in carrying out their agenda.

    Likewise, Federal ministries should contribute sizable amount from their budget. It should be mandatory.

    6.I had submitted a comprehensive plan to Mr Salim A. Gilani, then DG, in 1993 for allowing ‘Air-Time’ sale to local bodies/provincial/National elections contesting candidates with a ‘code of conduct’ given in above referred plan. This plan should be available in the PBC Hqrs and also at Radio Pakistan , FaisalAbad where I was posted then. The plan was rejected by Sheikh Rashid Ahmed , then Advisor , Ministry of Information and Broadcasting because he did not want to let the ‘opposition’ and Independent contesting candidates to use ‘peoples medium’ for their election campaigns.According to my colleagues calculations it could accrue several billions of rupees because it was suggested that the campaigns will be allowed to use national and local languages. It was also suggested that individual contestants and political parties will be given equal time and choice to select the campaign language. This plan only can bail out RADIO PAKISTAN.

    RADIO PAKISTAN is a peoples voice and should not be allowed to die down.

    The government should have ‘no fears’ because conditions in broadcasting campaigns shall apply.

    Kindly,at least, give a chance to this plan.Recommend

  • ABID

    It is amazing news to oppose Radio Pakistan for collecting fees for its services, when hundreds of thousands mobile phone users are listening the live commentary ball to ball on Radio Pakistan, FM 93, FM 101, So the Mobile Companies must pay the Radio Pakistan per minute charges as equal to their call charges. In all over the world this is Radio Pakistan which is broadcasting live commentary on Mobile Phones. So can you give the exact data of mobile phone users who are using this service during all the year. So you didn’t suggested any mechanism for this.Recommend