- Green Growth
- Your Consultant
The Ministry of Finance (MoF) has added the 10 per cent CIT rate proposal to printed media in the amended CIT Law. What is your view?
Of course, I want so. That is the expectation of media organisations in current context of economic hardships. The press has more than once voiced its proposal for a lower CIT rate.
Vietnam Journalist Association’s leadership has voiced its aspirations to the MoF management.
I expect the upcoming National Assembly session next month to pass the amended CIT Law which includes the proposal to lower CIT rate on the press from 25 to 10 per cent.
The press’ argument is based on the fact that the press involves activities in cultural and ideology field, so press items are also cultural items.
However, media organisations are not given any incentives in regards to corporate income tax application, whereas businesses in diverse cultural fields such as education, training, vocational training, healthcare, sports and environment benefit from the 10 per cent preferential CIT rate.
Some people say media organisations should not receive tax incentives as these entities are profitable and their staff members enjoy high incomes. Is that true?
Press activities are very demanding and many newspapers are struggling to sell advertising these days. Meanwhile, expenses to feed media organisations are escalating such as printing paper and associated costs.
What hardships are media organisations, particularly print media, suffering?
Income sources of most print media agencies rely on distribution and advertisement. Revenue figures from distribution of many print media have sunk in the face of constantly surging paper prices, making them to live on advertisement sources.
The competition assessment report in 10 fields conducted by the Ministry of Industry and Trade’s Vietnam Competition Authority in 2012 shows that advertising market’s total revenue peaked to VND17.206 trillion ($820 million) in 2011, from VND9.057 trillion ($431 million) in 2008. In 2012, the figure was around VND18.6 trillion ($885 million), mainly coming from television broadcasting. Printed media earned revenue of around VND1.6 trillion ($76 million) last year, sliding 8 per cent against 2011.
The MoF had acknowledged that distribution of most media organisations incurred losses and they had to use advertisement revenue to offset the shortfall. Printed media agencies counted losses in 2011 and 2012, considering both distribution and advertisement activities.
These figures show that media agencies are encountering multiple difficulties. Thereby, 10 per cent CIT incentive to printed media, including advertisements on the prints, is important to help them weather the stormy economy.