MarCom Collective Meets Prime Minister Highlights Sector’s Contribution to the Nation Seeks Policy Support to Revive the Industry

Standing from left - Roshani Fernando, President – Market Research Society of Sri Lanka; Mario Nesaduray, President - Association for Outdoor Advertising Agencies (AOAA); Rohan Rajaratnam, Convener, MarCom Collective; Bathiya Jayakody, Member, Video and Film Production Association (VAFPA); Santhush Weeraman, President, VAFPA; Prime Minister Mahinda Rajapaksa; Tharaka Ranwala, President – International Advertising Association (IAA), Sri Lanka Chapter; Delan Silva, President, Sri Lanka Association of Printers (SLAP); Thayalan Bartlett, Convener, MarCom Collective; Roshan Wijeyaratne, President - Event Management Association of Sri Lanka; Sugibun Sathiyamoorthi, President - Association of Accredited Advertising Agencies (4As), Sri Lankan Chapter; Arjuna Herath, Senior Partner and Head of Consulting, Ernst & Young, Sri Lanka and Maldives and Sulaiman Nishtar, Partner - Tax Services, Ernst & Young, Sri Lanka.

1. Expenditure on promotion and advertising to be made fully deductible and an additional deduction of 100% to be allowed.
2. The Industry be permitted to account for VAT on a cash basis. 
3. Finance cost incurred by the industry to be made tax deductible in full
4. As the industry is not asset laden an additional deduction equal to 100% of the staff cost to be allowed
5. Clarity on “associated persons” and “gross turnover” to apply the reduced rate for SME to be provided
6. 6. The gains and profits from the services provided by the industry to be taxed at a reduced rate of 14%.
7. Any reduced rate tax losses to be allowed to be deducted against profits taxed at a higher rate and tax losses be allowed to be carried forward indefinitely.
8. Preservation of cashflows

• • The government to facilitate short-term working capital loans at concessionary rates for companies with a net annual turnover of less than LKR 50 million to ensure payment of wages and other fixed overheads. Granting of loans should be tailored to meet the low-fixed asset base in the industry. 
• The government and all other Ministries, Departments, State-Owned Enterprises, Promotional Boards etc. to immediately clear total outstanding payments due to the marketing communication industry.  

9. Generation of future business

• The government to provide subsidized rates for advertisements on TV, Radio, and Newspapers. The special rates could be applicable to organizations over the next 03 – 06 months making it more affordable to advertise using mainstream platforms and thereby stimulate demand. 
• The government to enforce strict regulations to control foreign companies from setting-up operations in the country in order to safeguard the local industry. We propose that foreign companies should be set-up only through a joint venture with local companies having not less than 50% of equity control.

• The government to establish a self-regulatory institution through a statue to provide overall leadership and govern the marketing communication industry. The control of the institution will be with the marketing communication industry whilst interfacing with the government and other stakeholders (e.g. association heads) to create an environment that is conducive for the growth of the industry.

• The government to establish a separate organization to promote media education in line with international standards. This organization or body will assist with the development of media personnel and consequently improve the overall quality of the media sector in the country.