Outdoor advertising including hoarding boards are also a source of revenue, but contracting local governments to collect taxes is losing billions of rupees in revenue. Currently, there is a data that collects about 19 billion 26 million rupees in the revenue of outdoor advertising including hoarding boards, but only about 2.37 billion rupees is being collected.

Any company uses outdoor advertising (including hoarding board, flex, glow-sign board, banner, poster, shutter painting and wall painting) along with other means of communication to promote its market. Revenue should be paid to the local level for advertising in this way. Municipalities have given the responsibility of collecting that revenue to contractors. Some contractors have been collecting money by bullying and the state is also losing revenue.  There are many examples of

nonsense. Last February, Riddhisiddhi Cement sent a letter asking the municipality to pay the tax owed to Ashrit Nirman Seva to the Global IME Bank account. Ashrit pointed out to Riddhisiddhi that he had the responsibility of collecting advertisement tax. Bharatpur metropolis, which has been collecting advertisement tax at an annual average of 3 crore rupees, has given a contract to Ashrit Nirman Seva for the fiscal year 2081/82 to 2083/84 to monitor advertisements and collect tax. Chitrasen Adhikari, deputy head of Bharatpur, says that the contract was awarded due to the lack of manpower and complicated issues.

Pranish Construction in Bharatpur wrote 'Tax Not Paid' on the compound wall of Coca-Cola Company's contact office and painted the logo in black. Pranish, who got the contract from the metropolis, did this in December 2079 saying that the tax of Rs 4 crore was not collected. "We have been paying taxes regularly, that year we wanted to investigate after demanding more tax than before," says the representative of Coca-Cola producer company Bottlers Nepal (Tarai) Limited. We also filed a complaint with the advertisement board and the police office.' 

Unilever, a multinational company that manufactures products like Sunsilk Shampoo, Close Up Manjan, Lux Soap, Vaseline, Surf Excel, has almost stopped outdoor advertising due to tax collection disputes. The company said that the contractor who had sent a bill worth crores of rupees in the name of revenue went to Unilever's office in India and caused an uproar saying that he had not received the payment.

Sujit Ale, brand manager of Jagdamba Enterprises, which manufactures construction materials such as iron rods, pipes, poles, and beams, says that although outdoor advertising is an effective means of promotion for advertisers, the tax rate is extremely burdensome. He says that he has to pay four/five times more tax than his expenses for advertisement. "There is collusion between the vendor and the municipality, the tax rate will increase after the agreement on food," he said.

There are also examples of the same contractor taking dozens of municipal contracts. Akriti Advertising of Morang, Pokhria has bagged the contract to collect advertisement tax of Bhirkot, Birgunj, Virtamod, Dhangadhi, Gajuri, Itahari, Putlibazar, Sainamaina, Sandhikhark, Shivraj, Sundar Bazar, Tokha and Tulsipur Town/Village. This company sent a letter to Patanjali Ayurveda on June 10 and requested to pay tax of Rs.

Akriti Advertising published a notice on July 8 stating that it has received mandates from various local levels to collect advertising tax and has warned that the advertising materials of companies that do not pay tax within the specified time, advertise illegally or keep content in prohibited places, will be fined and the entire cost will be recovered from the relevant company. "If there is any damage to the reputation of any firm/company/establishment or loss/damage during the said work, it is informed that the company concerned will be fully responsible for it," the notification said.

Tara Thapa, the deputy mayor of Sunsari's Ramdhuni municipality, has said that there is no expected revenue collection from advertising tax in her municipality and all taxes are collected through the contract process. She asserted that she emphasized on increasing the scope of tax rather than the rate of tax and for this she has been motivating the businessmen to participate in the tax. She said that during the collection of taxes through contractors, the advertisers also receive complaints of fear, threats and political influence. "Our municipality is not immune from such problems," she said,  "Sometimes there is a problem, we have solved it."

According to the Local Finance Act and the Public Procurement Act, municipalities claim that they can collect advertising tax by mobilizing internal manpower or through bidding process. But instead of mobilizing internal manpower, municipalities have been collecting revenue entirely from contracts. Experts say that because this process is not transparent, there is an increase in irregularities in the field of 'outside advertising' and billions of revenue is being leaked.

According to the 'final report on the study of the advertising market through on-site outdoor advertising (hoarding board)' published by the Regulatory Advertising Board in June 2081, 74 percent of municipalities have given contracts to collect such revenue. Municipalities have given contracts for a maximum of 5 years, the same contractor has taken dozens of municipal contracts. 

Roshan Srivastava, a businessman in this area, says that the outdoor advertising market has been contaminated by collusion between public representatives, employees and contractors. "It is natural for the government to contract for some development, but can work like tax collection be contracted?" he asked,  The advertiser is bound to pay as much tax as the contractor demands. At a time when the economy has slowed down like this, the local government has run the contractor's quilt. Advertisers are panicking. Why can't local bodies regulate ?' 

Lekhnath Aryal of Shivam Cement comments that the contract system has increased distortions. "If a contract is made to collect advertisement tax, income tax, excise duty, customs fee will all be done through the tax collection contract," he says, "Although the right to impose and collect advertisement tax belongs to the local level, that tax also belongs to the provincial government. But the municipalities have not sent the share of advertising tax to the provincial government.' 

Due to the non-transparent tax collection on outdoor advertising, local level income has been lost and advertisers have to face harassment, businessmen say. Last January, the Nepal Cement Manufacturers Association issued a statement and objected to the indecent behavior, pressure and demand for payment in the name of advertising tax collection.

"Advertising agencies that take contracts to collect taxes submit voluntary bills to the offices of various industrial and commercial companies, pressurize them for payment, send a large number of people, engage in indecent behavior and abuse, make unnecessary phone calls, threaten, and tear advertisements at will, so we request the relevant agencies to take action against those who do such actions," the statement of the association said. 

The agencies that get the contract for advertising tax collection respond that they get the contract through competition and the work of revenue collection is very challenging. According to Manoj Chauhan, head of Akriti Advertising, which has received contracts from various municipalities, the municipality only gives a slip of paper to the companies that have received the contract to collect the money and does not provide any assistance in taking action against companies that do not pay tax. 6 . 'We are only facilitators, on the contrary, we have been beaten,' he says, 'Some businessmen have not paid me crores of rupees for ten years . My shoes are torn, I am in debt, the municipality has taken away my house and land. Businessmen are saying that they don't pay tax. What are we going to do?' 

According to the advertisement board's report, if all the local levels of the country collect revenue themselves, the revenue from advertising will increase to 19.26 billion rupees. "There is a possibility of an increase in the local level's internal income from 9 to 41 percent," said the report, "There is no need to turn to foreign countries for internal revenue." But for this, advertising should come under the scope of tax, laws should be formulated, and the role of the regulatory body should be effective. Out of the 25 municipalities surveyed by the board, the share of outdoor advertising in the overall income has been found to be less than one percent.

Not only advertising professionals and advertising experts, also the Minister of Communication and Information Technology, Prithvi Subba Gurung, has been insisting that the revenue collection from the hoarding board should be done by the local level itself. "It has been found that there is a wide revenue leakage in advertising from hoarding boards and about 20 billion rupees in revenue has been lost," he said in an advertisement board program some time ago, "I request that the contract be stopped immediately and the revenue collected by myself." 

As outdoor advertising is more in urban areas, busy places and business centers, the metropolis has been getting 90 percent of the revenue. Similarly, sub-metropolitan cities occupy 5 percent, municipalities 3 percent and rural municipalities 2 percent. Out of the 37 surveyed, only 25 local levels have recorded income from outdoor advertising. It is clear that there is corruption. 

The Constitution and the Local Government Operation Act have empowered states and local levels to impose and collect advertising tax. According to the Inter-Governmental Finance Management Act 2074, 60 percent of the amount raised from advertising tax should be deposited in the local reserve fund and 40 percent in the state reserve fund. According to Section 4 of the Advertising (Regulation) Act 2076, a person, business or firm wishing to place an outdoor advertisement (hoarding board) must obtain permission from the relevant local level. It is mentioned in the act that the criteria determined by the advertisement board should be taken as a basis and the local level can designate a particular place as a prohibited area for outdoor advertising. 

Laxman Humagai, chairman of the advertisement board, says that most of the local levels have not been able to act according to their rights and responsibilities. "There is apathy of the local level in the collection of internal revenue," he says. There is a tendency for local levels to depend on central government grants without collecting revenue themselves.' 

Some local levels have also argued that collecting revenue through contractors will result in more income and less hassle. According to the deputy chief officer of Bharatpur, the contract was awarded due to lack of manpower and complicated matters. "The first thing is the human resources and this is also a complicated issue," he says, "We did not collect it ourselves because it is easy to contract after looking at the past trends. The tender has been done because the people's representatives consider it a bit difficult.'  A study of

advertisement boards showed that despite the increase in the number of billboards due to urbanization, it had a negative impact. Besides reducing the beauty, it also causes the risk of road accidents and the digital boards of some places are hacked.  . Humagain, the chairman of the board, also said that the random and uncontrolled placement of hoarding boards has had such negative effects. He mentioned that although the law regulating advertisement was passed in the year 2076, the method and procedure related to hoarding board has not been defined and the practice of contracting is still in place. "We are preparing to take it forward as a national issue," he said. 

When inquiring about the reason why the advertisement tax collection is not transparent and entrusting it to the contractor, the municipalities have responded that they are not used to this type of tax collection practice, there is no policy basis or it has not been created, the market is small, lack of awareness, advertisement rates are not set, lack of coordination and not enough manpower.

'It is true that we have not been able to collect as much advertising tax as we should,' says Bhim Prasad Dhungana, Mayor of Neelkanth Municipality, who is also the chairman of the Federation of Municipalities, 'We have become a municipality from a village. Earlier, there was no ad tax when it was a village. In the background of not having the habit of collecting and paying such taxes, bringing outdoor advertising under the ambit of taxation has been the main problem. But it is gradually improving.' 

Dhungana, the chairman of the Municipal Federation, admitted that even though the local government has the sole authority to levy advertising tax, it has not been managed. He also said that various municipalities are being oriented about this. "We are gradually bringing everyone into the tax range, we are trying to bring them on track as far as we know," he said, "a lot of money can be collected, but we have insisted on widening the tax rate, not increasing the tax rate at all local levels." 

Kathmandu Metropolitan City has been collecting such tax itself. Mahaganar currently charges 1,000 rupees per square foot for advertising through flex boards, digital boards, neon signs, and temporary boards up to a maximum of twenty square feet on the right and left side of vehicles. 100 rupees per day,  Sponsorship Board has fixed a tax of Rs 1,000 per square foot and Rs 100 per bag for advertising. According to the Revenue Department of the Metropolitan Corporation, in the financial year 2081/82, the advertisement tax was collected at Rs. 84 lakh 91 thousand 587 rupees in 2080/81, 3 crore 21 lakh 27 thousand rupees in 2079/80, 7 crore 43 lakh 50 thousand rupees in 2078/79. Kathmandu Metropolis has been discouraging outdoor advertising as the city is ugly and prone to accidents.