Nepal’s OOH Advertising is Crippling and a Rapid Response is Required

Advertising stands as the backbone of the business industry. It's the spark that ignites consumer interest, breathing life into brands and catalysing economic growth. Through cleverly crafted messages and eye-catching visuals, advertising not only informs but also stimulates consumption, creating a cycle of demand and supply that fuels the market. But what happens when the very foundation designed to elevate businesses becomes a hindrance?

Dive into the heart of Kathmandu, and you'll find a bewildering scenario that paints a stark picture of disparity. On one side of Kalanki's ring road, the tax rate for hoarding boards is pegged at a staggering Rs 1000 per annum per square foot. Cross to the other side, and it plummets to Rs 200 for the same space. This haphazard pricing strategy is not just confined to the capital but is a widespread issue, with each municipality setting their own arbitrary rates.

For ad agencies and brands, this taxation maze is more than just confusing—it's financially crippling. Considering the exorbitant costs, the margins for agencies are thinning to a breaking point, leaving them grappling for survival in a highly competitive market. The situation is further exacerbated by the outsourcing of tax collection to external contractors, leading to a chaotic and inefficient system where many taxes remain uncollected. Amidst this disarray, reports have emerged of brands being slapped with massive taxation invoices, amounting to crores, derailing their advertising efforts as they have significantly reduced their OOH advertising activities.

Is anybody doing something about this?

In this turbulence, the role of the Nepal Advertisement Board becomes crucial. Just as the tax on digital marketing mediums like Facebook boostings, it's imperative now more than ever for the Board to step up and spearhead the creation of a progressive taxation system. A system that acknowledges the size of advertising business, margins for agencies, cost effectiveness for brands and the economic realities of businesses.

By instituting fair and rational tax policies, the Board can alleviate the financial strain on ad agencies and brands, paving the way for a more vibrant and sustainable advertising ecosystem in Nepal. It's not just about rectifying a tax structure; it's about fostering an environment where creativity and business can flourish together, unhindered.

For Nepal's advertising sector to truly thrive, it needs more than just creative content; it requires a supportive framework that champions growth, innovation, and fairness. The time for change is now. Let's pave the way for a brighter, more prosperous future for advertising in Nepal.