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KARACHI The City District Government Karachi is unlikely to meet its revenue target from advertising hoardings and billboards in the current financial year due to the prevailing financial crisis and the elimination of some authorised roadside advertisement spots.
Sources in the government said that a target of Rs550 million was set for revenue to be collected by the local tax department through roadside hoardings and billboards within the jurisdiction of the CDGK, and another Rs150 million through 'shop signboards, sunshades and other out-of-home communication media' during the financial year 2008-09.
However, an amount of around Rs402 million has been recovered under the two heads as of May 18, 2009.
Referring to the advertisement revenue generation position, an official of the tax department said that recovery had been acceptable for shop signboards and sunshades.
He said that about 73 per cent of the targeted amount was collected under this head, compared to only 22 per cent of the tax target for roadside hoardings and billboards being collected. Under the head of fees and tax collected from the private building owners who allowed public advertisement fixtures on their rooftops, the government had collected about 173 million so far, the source added.
There existed about 4,000 billboards and hoardings on grounds, buildings and private sites in 2005, while the total earning of the government through taxation of these was around Rs100 million.
After amendments were introduced in the advertisement hoarding city government bylaws in December 2006, a new survey was conducted and about 1,700 sites were identified for advertisement and erection of hoardings along roadsides and near roundabouts in the 18 towns of the CDGK.
With the passage of time, a source confirmed, the number of government authorised sites decreased due to the construction of flyovers and other development projects, while the number of private sites increased. He added that at present advertisers were only using about a third of the government approved land sites (about 500) and only about 300 private sites.
About 60 per cent of the revenue generated through government sites comes from Gulshan-i-Iqbal, Jamshed, North Nazimabad and Saddar towns.
After an era of economic prosperity, the city of Karachi is now also faced with the effects of the global financial crisis in the shape of soaring commodity prices and the reversal of the housing boom. As such, it will be difficult for the CDGK to reach its revenue targets as far as advertising hoardings are concerned, analysts say.
An official indicated the CDGK would have to widen its net to increase fixed sources like shop signboards and sunshades, shopping mall displays, bus terminal signage, neon signs and various transitory media outlets.
He added that there were still many shops and sales centres which were not recorded for tax purposes or were not paying the required amount due to various reasons, including malpractice on the part of staffers.
With the financial year drawing to a close, the local taxes department of the Revenue Group of Offices, CDGK, has advised advertisers, companies and shop owners to deposit the advertisement fees for 2008-09 immediately to avoid legal action through magistrates, who can impose fines and jail custody.
It is learnt that the CDGK has set a revenue target of Rs750 million for hoardings and billboards, while another target of Rs240 million has been set for shop signs and sunshades, for the year 2009-10. A difficult target to meet in the given situation, said insiders.
The executive director of the local taxes department, M. Rehan Khan, told Dawn that the revenue would touch Rs500 million in the current financial year. Though the number of government sites had decreased in the wake of public security, aesthetic needs and development of flyovers, intersection and signal-free corridors, efforts were being made to increase the advertisement revenue and attract more and more advertisers to the government authorised spots, he said.
During the ongoing financial year, 'till mid May we have generated about Rs402 million, which included Rs110 millions from shops, Rs118 million from land sites and Rs173 million from private property holders who allowed the utilisation of their premises for advertisement purposes.'
He said that opportunities for advertisers interested in occupying government sites were currently lessened. A good number of sites along Shaheed-i-Millat Road, University Road, roads in Saddar and Jail Chowrangi had to be eliminated due to the development of public welfare projects in recent years, he added.
Responding to a question, he said that the shop signboards and sunshades could be a greater and permanent source of revenue, but that needed a proper and fool proof collection system. The government was also contemplating the outsourcing of the survey of shop signboards and sunshades and other commercial displays and fixation and recovery of taxes, Mr Khan informed Dawn.
