Newspapers in Malawi used to be exempt from sales tax. But earlier this month the finance minister announced they would start attracting the standard 16.5% VAT. For a press that’s already over-reliant on state advertising, the predicted drop in sales – and corresponding need to bring in even more government ad spend – is very bad news for free media. By JIMMY KAINJA.
In Britain in the late 18th and early 19th centuries the radical press was a political force owing to its independence from political and business interests. It was, in short, a force for public good. But successive governments were not at ease with this situation. As a way of restricting the radical press, the government of the day introduced stamp duty and taxes on newspapers and advertisements.
Radicals and social reformers argued that this tax prevented the workingman from access to news and, most importantly, knowledge. They described it as a “Tax on Knowledge”.
Malawi’s government has announced that newspapers in the country will have to pay 16.5% VAT in the 2011/12 financial year. The government’s motive for imposing this tax is very different from that in Britain 100 years ago. In Malawi’s case the tax is not exclusive to newspapers, it is part of the government’s new tax regime that has affected substantial, but not all, sectors of the economy. (Other previously exempt goods include water, bread, milk and meat.)
It also has to be said that Malawi newspapers cannot be compared to the radical press. They are completely different in terms of content, motivations and business models. Yet the introduction of the new tax could have the same impact on Malawi as it had in Britain.
Kondwani Nakhumwa, the chairman of Malawi’s parliamentary committee on media, has “asked” the government for a tax exemption for the media. Yet he failed to make a strong enough case. “I wished there were tax waivers on transmitting equipment and newspapers if the country’s media is to be promoted,” he reportedly said. Nakhumwa’s wishes will not be fulfilled, yet the new tax regime means newspapers have to rely on advertising revenue even more. It is certainly not an easy task to be chasing advertising money while facing the prospects of losing readers owing to the inevitable price increases newspapers will have to make.
Unfortunately, the private sector is very small in Malawi. This leaves the government as the main source of advertising revenue. Successive administrations have used this advantage to get the press on their side. You have to be seen to be on the side of the incumbent administration and be as lenient as possible (if not outright biased), otherwise you will not get advertising revenue from the government and its subsidiaries.
Prior to Bakili Muluzi’s re-election in 1999, Sam Mpasu, a senior cabinet member and former education minister, admitted to NGO Article 19 his government had implemented a policy banning advert placements in all the media outlets that sympathised or identified themselves with opposition parties. Mpasu said: “The government would revise its policy if the media were ready to review their editorial strategies as well.” A few newspapers have gone out of business since, including The Chronicle, The Mirror and The Enquirer.
Contrary to common perception, Mark Twain noticed that history does not necessarily repeat itself, but it does rhyme. He was right. Eleven years after Mpasu’s admission to banning advertising in newspapers that did not align themselves with the ruling elite, the Media Institute of Southern Africa petitioned Malawi’s incumbent president, Bingu wa Mutharika, to reconsider his administration’s withdrawal of advertising from Nation Publications Limited. NPL publishes three weekly newspapers, and the country’s highest circulated daily, The Nation. The advertising withdrawal was the government’s reaction to the newspaper’s critical stance on the government’s proposed “quota system” of selecting students for university.
These are the pitfalls of the new tax regime. Newspapers will turn into PR machines, working in the service of incumbent administrations to survive. The new tax regime will have dire consequences for Malawi’s democracy and the people’s right to know. The deafening silence of Malawi media and media watchdogs on the issue so far is very discomforting and it may point to a bleak future for the country’s newspaper industry.
Malawi, like any democratic country, needs newspapers like The Nation that are prepared to disagree with government policies and are not afraid to stand up to the ruling party. News media that are free and independent of the state, free of any form of coercion and free from the interests of powerful people, organisations and corporations are not only vital to growth and maintenance of democracy, they are also pivotal to development and stability of any country. Tax is meant to be a public good; tax on newspapers is contrary to this notion. FAM
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Jimmy Kainja is a lecturer and seminar leader at London Metropolitan University. He is also a blogger and an independent researcher. Jimmy is interested in media and democracy, governance, democratisation and development in sub-Saharan Africa, and Malawi in particular. He blogs at www.jimmykainja.co.uk.
Photo: Malawian journalists chant anti-government slogans and sing songs as they celebrate World Press Freedom Day in
2005. REUTERS/STR New