Advertising expenses are rejected by APNS and PBA

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A number of Pakistani newspapers, broadcasters on Saturdays, and the Pakistan Broadcasters on Saturdays Association (PBA), have called on the government to retract the proposed amendment in the Finance Bill 2024-25 that restricts the deduction of advertising and sales promotion expenses as it will adversely impact the media industry’s economic well-being.

Both organizations sent separate letters to the Prime Minister Shehbaz Sharif and the Finance Minister Muhammad Aurangzeb expressing their concern that members of PBA and APNS were already facing severe hardships as a result of the contraction of the documented economy, the lack of innovation, and the slow growth of the economy as a whole.

According to them, according to the amendment in the recent finance bill, companies can no longer claim deductions for up to 25% of their total sales promotion and advertising expenses on their income tax returns due to the recent amendment.

According to the letter, there will be an increase in the tax liability of large multinational companies, as well as an increase in the amount of super tax imposed on this increase.

Despite the fact that both entities mentioned that the effective tax rate they pay in Pakistan is already one of the highest in the region, they emphasized that the restriction on claiming sales promotion and advertisement costs would further aggravate the situation, which will decrease Pakistan’s attractiveness from a foreign direct investment standpoint.

According to the APNS and PBA, the government has taken steps in formalizing the economy and all stakeholders have taken positive steps to achieve that goal. The leaders of these organizations expressed awareness that a slowdown is inevitable and urged people to be patient and resilient at this time, including their own members and employees.

Both bodies made it clear that their members are vulnerable to the effects of further economic decline, asserting that a shrinking economy could lead to job losses following the closure of small media channels and newspapers, which would negatively affect the wider community.

The APNS and PBA have committed to assist the state and the government despite challenges, but have also urged for rationality in the decisions relating to taxation.

In a statement, they cautioned the government against short-term gains which increase the cost of doing business for long-term partners and warned that if such measures continue long-term, it could have a negative impact on the sustainable growth of the documented economy.

There has also been criticism from the press and the media organizations that the proposed amendment was weak, didn’t consider global best practices and the local business environment, and would impede foreign direct investment in Pakistan.

Timenews1 provided that information.

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