State media eye financial relief - Minister appeals to Parliament for tax exemptions

The Minister of State for Government Communications, Felix Kwakye Ofosu, has called on the Ministry of Finance and the Ghana Revenue Authority (GRA) to heed the request for tax exemptions for state media houses to enable them to continue providing essential public services.

He also appealed to Parliament to support the granting of tax waivers to the state-owned media entities to make them more competitive and efficient.

Mr Ofosu said the Graphic Communications Group Ltd (GCGL), the Ghana Broadcasting Corporation (GBC), the New Times Corporation (Times), and the Ghana News Agency (GNA) paid exorbitant import duties at the port whenever they imported critical equipment and inputs for their operations.

Granting the request for tax waivers would lift the financial pressure off the entities faced with challenges in sustaining their operations, he pointed out.

“Indeed, since assuming office, I have been inundated with requests from all state media.

The Graphic Communications Group has raised concerns, for instance, about newsprint and how expensive it is to bring them and clear them at the ports,” he said. 

GCGL

For the GCGL, the company solely depends on its internally generated revenue and resources as a state-owned limited liability company to pay its workers and purchase inputs, but it procures all the inputs in foreign currencies.

The inputs include newsprint (the paper used to print the news), ink(s), plates, machine parts and chemicals which are imported in dollars and Euros and on which the company spends approximately GH¢4.5 million of import duties and taxes annually.

The amount excludes the import duties and taxes the company pays for inputs at its subsidiary, GPak.

Again, the country’s constitution and regulations governing the company’s operations mandate it to, among other things, curate, publish and disseminate news through its newspaper publications daily to all regions and stakeholders across the country to ensure citizens are well informed about national development issues.

The company is also saddled with a bureaucratic system as it has to meet provisions in the Public Financial Management Act and the Public Procurement Act, among others, like any other public sector entity, which impedes its turnaround time in many areas.  

With the digital age at hand, the company also needs a fresh capital injection to push its diversification agenda.

Same situation

Responding to questions on the floor of Parliament last Thursday about the steps being taken to support the GBC, and other state-owned media outlets to be efficient and competitive, especially the challenges of duties on items they imported for their operations, Mr Ofosu said: “Similarly, the GBC has to pay exorbitant duties at the port when it wants to buy transmitters.

“The same with The Ghanaian Times. If they want to buy printing equipment, they face the same difficulty,” he said.

He made the appeal in response to different questions from the Minority Leader, Alexander Afenyo-Markin, and the Member of Parliament (MP) for Gbawe-Weija, Jerry Ahmed Shaib, regarding the efforts the government was making to aid GBC and other state media houses to overcome their present predicament.

Crippling law

Answering, the minister said he had committed himself to engaging the Ministry of Finance and the GRA on the matter to make a strong case for those entities because they provided essential services.

He explained that the enabling laws that set them up in the past, whereas it was well-intentioned, tended to cripple the state-owned media outlets a bit, making them uncompetitive.

“This is because they are competing in a very fast-evolving environment and, therefore, they need to stay ahead of the game.

“If they are state-owned organisations, what advantages are they deriving from that status compared to private organisations, and I believe that at least the request for tax exemptions should be heeded by the GRO and the Ministry of Finance,” he said.

Mr Ofosu expressed the hope that some progress would be made on the matter, pledging to be on hand to brief the House on any progress made.

“I trust that we will get the full support of Parliament if such a request were put before us,” he said.  

Unsustainable debt

Throwing more light on the challenges facing the GBC, Mr Ofosu said the corporation was currently saddled with a legacy electricity debt of GH¢18.8 million.

That, the Minister of State for Government Communications said, comprised GH¢13.77 million owed to the Electricity Company of Ghana and another GH¢5.11 million owed to the Northern Electricity Distribution Company.

The debt accumulated over the period the government paid electricity bills for national security institutions and other state agencies, including the Ghana Police Service, which were co-located at GBC facilities and shared a common meter.  

Following the cessation of those payments, the burden of the accumulated unpaid bills fell on GBC.

“While GBC continues to honour its current electricity obligations, the legacy debt remains unpaid,” Mr Ofosu, who is also the MP for Abura Asebu-Kwamankese Constituency, said.

He told the House that for the past two and a half decades, GBC had scarcely received any direct capital investment from the central government.

Most of the corporation's studios and transmission infrastructure remain outdated, and retooling efforts have been funded primarily through the corporation's internally generated funds and limited international support, most notably from the government of Japan. 

Incapacitated

He indicated that GBC was statutorily mandated to maintain its presence in all regional capitals of the republic, and the creation of the six new regions had imposed an additional obligation which the corporation, constrained by limited financial resources and infrastructure deficits, had thus far been unable to meet.

To address such a gap, he said an agreement was reached between GBC and the Ministry of Finance under the previous government, whereby the corporation relinquished a prime parcel of land adjacent to the Jubilee House in exchange for funding to support the establishment of regional FM stations in the new regions.

“The Ministry of Finance did not fulfil its end of this arrangement, but we will continue to pursue the matter with the Finance Ministry with the view to having the payment effected, which GBC can invest in the establishment of its presence in the six regions,” he said.

He said the corporation relied on outdated analogue technology with its only outside broadcasting van, the OB van, which was now approaching two decades of service.

“This is woefully inadequate for the demands of modern broadcasting.

As a result, their corporation is often compelled to rent high-specification OB vans, particularly when covering high-profile national events or producing content for international audiences at an exorbitant daily cost of up to $15,000,” he stated.

“This practice is not only economically unsustainable but also emblematic of the broader resource constraints that continue to cripple the corporation's ability to operate with autonomy, efficiency and dignity on the global media stage,” he said.