National Televisions Elude Taxes, Opposition-Linked Channels Pay
16 August, 2012
National Televisions Elude Taxes, Opposition-Linked Channels Pay

 

Georgian television landscape remains closely linked with politics. Ahead of the October 2012 elections, developments in the television sector mirror the highly polarized political environment in Georgia. All major stations that survey current affairs content, either belong to the pro-government camp or, with some nuances, appear to support a change in government and the opposition. The pro-governmental televisions accrue tax duties up to millions while the pro-oppositionists clear tax-duties completely.

 

Georgian television landscape is politically polarized: all TV stations that provide

current affairs coverage – on the national as well as on the local level – are perceived as favoring one political camp or the other. None of the stations (with the exception of the Patriarchate’s channel), including the Georgian Public Broadcaster (GPB), funded by tax-payers money, are perceived as truly independent actors that provide balanced news coverage, holding both political camps equally accountable. These are major findings of a new report published by a non-governmental Transparency International Georgia (TI Georgia) on August 10, 2012.

TV remains the most important source of information on current affairs. In Tbilisi, 80% of people first turn to their TV for news. Outside the capital, 92% of the population name television as their main source of information on current affairs.  In 2011, Georgians watched on average 253 minutes of TV per day.

The dominant role of television in media encourages both the ruling opposition parties to establish a sphere of influence over key television stations and technical infrastructure.

Therefore the temporary introduction of must-carry regulation –that requires cable operators include licensed TV stations into their packages in the weeks before the October 1 parliamentary election – has been an important step in the right direction.

A NDI survey from June 2012 highlights that the vast majority of the population turns to the two national private stations for news, with 86% of respondents saying they watch current affairs coverage on Imedi and Rustavi 2 – both imputed with the ruling party influence.  60% watch Channel 1 (PBC) believed to be connected with the authority too.

Survey data also indicates that Maestro and Kavkasia [the favorite channels to opposition fans] have increased their news audiences in the past year. If only 6% of respondents said they watched political coverage on Maestro in spring of 2011 the figure increased to 19% in 2012; Kavkasia saw an increase from 9% (2011) to 19% (2012). Only 5% of respondents said they watched current affairs coverage on TV9 [affiliated with political tycoon Bidzina Ivanishvili and his political coalition Georgian Dream] in 2012. 74% said they do not have reception of the station.

The popularity of pro-governmental Rustavi 2 and Imedi is partly explained by their better technical ability to reach about 96% of all Georgian households. The taxpayer-funded Channel 1 only reaches about 82% of TV households. Stations that provide a critical view of the government’s activities suffer from their limited technical reach: 31% of respondents said they could receive Tbilisi-based Kavkasia TV, 23% receive Maestro TV, and 15-20% is supposed to get an access to TV9.

Available financial data shows that Imedi and Rustavi 2 play in a very different league than other channels when it comes to revenues. In 2011, Rustavi 2 reported revenues of GEL 39.294.999, Imedi of GEL 28.132.817. However, reported revenues of both dropped by about GEL 1million from January to April 2012 compared to the same period a year before. Advertising revenues and ‘other’ income decreased, while income from sponsorship increased. The main source to advertising revenues for Imedi and Rustavi 2 is likely to originate from government advertising campaigns funded with taxpayer money, although no financial data on the extent of government advertising on national TV is publicly available.

On the other hand, pro-oppositionist channels’ incomes tripled and even increased five-fold compared to 2011.  Maestro’s reported revenues soared from GEL 50.607 in 2011 to GEL 280.811 in 2012. Its advertising revenue was GEL 651.950 from March to June of 2012. Kavkasia revenues increased from GEL 123.036 in 2011 to GEL 303.553 this year as a result of higher advertising revenues mostly on expense of Georgian Dream. Private sector advertising dwindled in the reported period.

One interesting thing at Georgian TV market is that oppositionist TV channels especially Kavkasia and Maestro are the law-obedient tax-payers while pro-governmental channels elude taxes.

According to Georgian Revenue Service (RS) website, Imedi owes GEL 13.9 million in taxes, Rustavi 2 - GEL 5.5 million and the GPB - GEL 3.5 million. All accrued since a tax amnesty of 2010 that erased GEL 36 million of liabilities from the books of Georgian TV stations and major beneficiaries of tax amnesty were the national TV channels. Trialeti TV and a few other media outlets had accumulated some minor tax obligations of less than GEL 10 thousand. A small part of the amnesty also benefitted TV stations critical of the government: Channel 25 was relieved of some GEL 277. 500, and Trialeti TV was forgiven some GEL 45 thousand.

Kavkasia and Maestro TV at the time owe no taxes and enjoyed no amnesty.

 

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