Bailing out Radio Pakistan

The annual wage bill of Radio Pakistan is double the total volume of advertising revenue - the only way tax.

Kazim Alam March 03, 2012
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
The views expressed by the writer and the reader comments do not necassarily reflect the views and policies of the Express Tribune.


ABID | 12 years ago | Reply 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.
Meesaq Husain Zaidi | 12 years ago | Reply 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.
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