Broadcast cess proposed on cars equipped with radio, mobile users -Pakistan Press Foundation (PPF)

Paksitan Press Foundtion

Broadcast cess proposed on cars equipped with radio, mobile users

By Sajid Chaudhry

ISLAMABAD: Pakistan Broadcasting Corporation (PBC) has proposed to the government levy of one-time broadcast cess of Rs 2,000 per unit on local and imported cars equipped with radio and permanent 0.1% broadcast cess on all mobile phone users for its financial independence.

The proposed one-time broadcast cess of Rs 2000 per unit on local and imported cars would help generate net Rs 237.50 million and 0.1% broadcasting cess on mobile phone users will help realise Rs 1.858 billion per annum.

At present, PBC has only two sources of income–advertisement income and other income. The rest of current expenditure is borne by the federal government through grant-in-aid. The proposed measures if included finance bill 2011 and approved by the parliament along with the budget 2011-12 would end reliance on grant-in-aid from the government.

PBC was established as a Public Service Sector in 1972 converting Radio Pakistan, an attached department into an autonomous body. Radio Pakistan was fully funded by the government to meet its expenditure. Even after 1972, PBC was also provided full subsidy/ grant-in-aid for meeting its non-development /current expenditure after accounting for its own income from Broadcast Receiver License fee, advertisement income and other income. PBC management has always endeavored to increase its advertisement income, which shows an upward trend from Rs 4.693 million in 1972-73 to Rs 148.992 million in 2009-10. Broadcast Receiver License fee was abolished in 1999 through Finance Bill. Now PBC has only two sources of income i.e. advertisement income and other income. The rest of current expenditure is borne by the Federal Government through grant-in-aid. PBC is trying to increase its advertisement income despite competition from over 130 Private FM Radio Stations.

PBC has proposed following measures if approved by Parliament to decrease dependence on government grant-in-aid. One-time broadcast cess @ Rs 2,000 per unit may be levied on sale of all categories of imported or locally produced motorcars, which are equipped with radio receivers. According to Pakistan Autos Report 2010, over 125,000 motorcars are sold in the country annually. This proposal will yield an amount of Rs 250 million per annum. Collection charges in this case should not be more than Rs 100 per unit per annum resulting in a net income support of Rs 237.50 million to the Corporation.

Presently, GST @ 17% is being charged on the users of cellular mobile phones services. A broadcast cess may be levied @ 01% on users of cellular mobile phone, on the analogy of TV license fee being charged to consumer through electricity bills. The total mobile phone subscribers up to February, 2010 as reported in the “Pakistan Economy Survey, 2009-10” were 96.2 million. Assuming that 10.0 million subscribers are fictitious or inactive, the actual users would not be less than 86.0 million. Hence, in case a card of Rs 200 p.m, on the average, is consumed by each subscriber; PBC can raise Rs 2,064 million per year. If mobile telephone companies charges 10% as collection charges, the net income support to PBC will work out to Rs 1858 million.

Furthermore, on the average, if an addition of Rs 21 million per month, is made in the cellular market, the introduction of Broadcast Cess on cellular mobile phones will result in a progressive increase in the income of the Corporation.
Source: Daily Times
Date:4/17/2011