THE PRINT media industry has asked Congress for tax relief to help it recover, seeking exemptions from the value-added tax (VAT) on its key raw materials such as paper and ink, as well as on advertising sales.

The United Print Media Group Philippines (UPMG) said such exemptions would give the industry “greater financial flexibility” while economic conditions remain weak.

“Ultimately, the elimination of the burdensome 12% VAT would also be felt by readers via the higher quality of journalism in print media,” the association said in a position paper.  

UPMG said the volume of paper and ink procured by print publications declined drastically between 2017 and 2021, in part due to the coronavirus pandemic, in line with reduced output by publishers.

The group also cited data from Statista indicating that the share of advertising revenue taken up by newspapers in the Philippines was currently 5.8%, posting steady declines since 2012.

Advertising firm Dentsu, Inc. said in a 2021 report that digital advertising in the Asia Pacific region accounted for 55.7% of the ad market.  

UPMG President Barbie L. Atienza said VAT exemptions will stimulate advertising and boost revenue for print publications. He also added that the impact on government revenue would be minimal.

“We are talking of around P2.5 billion total advertising revenue for the year, he said in a Viber message, estimating the government’s VAT revenue from the industry at around P300 million each year.

He said the print industry employs 6,000 workers.

UPMG also proposed a lower corporate income tax rate of 15% for the industry, against the 25% called for under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law.

It also proposed a tax assistance package that would include a tax holiday and refundable tax credits for print subscribers and advertisers.  

UPMG also wants to partner with the Department of Education and the Commission on Higher Education to implement a separate news and current affairs subject in the student curriculum to help students appreciate the value of journalism and keep them from falling victim to fake news.

“In providing and disseminating news and information content, it is likewise undeniable that no other medium ensures equally accurate, reliable and appreciable content as print,” UPMG said.

Mr. Atienza said that the proposals have the support of Pangasinan Rep. Christopher V.P. De Venecia, chairman of the House Committee on Creative Industry and Performing Arts, who is drafting an initial bill based on the group’s suggestions.

“However, there being very limited time left in Congress now, (we would like to) initiate a conversation about (the state of the print industry) and hope that it is filed again during the next Congress,” he said.  

BusinessWorld is a member of the UPMG. — Russell Louis C. Ku