4AS APPEALS TO GOVERNMENT FOR SST EXEMPTION

KUALA LUMPUR, June 16  -- The Association of Accredited Advertising Agents Malaysia (4As) has submitted a joint memorandum to the government, appealing for tax and non-tax-based temporary relief support for their members in the wake of COVID-19 pandemic.

The association said the memorandum requested an exemption from Sales and Service Tax (SST) and double deduction relief of advertising expenditure incurred by all Malaysian-owned companies be exempted from claims submission, with extensions on qualifying criteria for tax deduction as the global pandemic created an impact towards Malaysian advertising industry.

“Although the Malaysian economy posted a 0.7 per cent year-on-year growth in the first quarter of 2020, it is expected to contract deeply with recovery estimated only at the end of 2020 due to the economic uncertainties posed by the pandemic,” it said in a statement today.

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It said in the last four months, only 80 per cent or less of businesses were operating at full capacity while some temporarily suspended operations.

“This led to many advertisers cancelling or rescheduling campaigns and slashing budgets as they used their advertising expenditure to shore up employee salaries and defray accumulated debts,” it said.

It said consumers were hit the hardest by the pandemic as they experienced unemployment and salary cut, resulting in weak consumer consumption, despite some receiving direct cash assistance. 

“To date, this has led to a decline of 20 per cent in advertising spend (Adex) in the first five months of 2020, on the back of decreased revenue streams ranging between 20 per cent and 50 per cent.

“Based on estimations, Adex is forecasted to drop by 20 per cent year-on-year by end 2020 while revenues are expected to flatten,” it said. 

 It said as the digital economy has been identified as a new development driver, the advertising industry is ready to support the government in accelerating technology adoption by creating effective digital content and campaigns to lift consumer spending patterns to pre-COVID-19 level to reinvigorate economic recovery.

 “To do this, the advertising industry needs to be in a reasonably healthy position over the next six to 18 months, ” it added.

The detailed joint memorandum was prepared in consultation with the Commercial Radio Malaysia (CRM), Malaysian Media Specialists Association (MSA), Malaysian Advertisers Association (MAA), Malaysian Newspaper Publishers Association (MNPA) and Outdoor Advertising Association of Malaysia (OAAM).

-- BERNAMA