Editorial: Thumbs-up to NRB
NRB’s move should bring good revenue for the government as the social media generate large amounts of advertisements
The recent directive of Nepal Rastra Bank, the country’s central bank, to have all transactions related to advertising on social media platforms made only through formal banking channels is highly welcome. It has come to light that several companies and agencies in Nepal are using informal channels, such as hundi and illegal cards, to make payments for social media advertisements to such platforms in foreign countries. Hundi is an informal channel for transferring money from one place to another. It is illegal in Nepal as it skips the banking channels and also does not follow the regulations of the central banks of world governments. NRB’s ruling is aimed at curbing capital flight in view of the growing trend of making payments from Nepal through the illegal channels for advertisements posted on social networking sites, such as Facebook, Twitter, Instagram and Youtube. Anyone found making payments outside the banking channels are to be booked under the Foreign Exchange Act, 2019, according to the announcement of the apex bank.
With nearly everyone having access to a mobile phone or a computer these days, advertising on the social media platforms has gained popularity in Nepal – as elsewhere. One has only to open a social networking site, and one is flooded by a stream of advertisements, at times almost to the point of annoyance. At any given time, millions of people, especially youths, are scrolling down a networking site, especially Facebook, and any advertisement posted there is sure to reach its target audience directly and quickly. However, quite unlike the traditional media, no one knows exactly how much money is spent on advertising on the social media platforms or how much money flows out of the country to pay for the advertisements. Since payments have to be made in foreign currency, there are high chances of it being misappropriated when informal channels are used.
Though belated, NRB’s move should help bring all transactions related to the advertisement business on the digital platform under the tax net. This should bring good revenue for the government as the social media generate large amounts of advertisements, may be even more than the traditional media. Definitely, the NRB’s directive will affect digital marketing, as some advertisers have already started whining about. But then it is very unfair when only the traditional media has to follow the government rules and regulations and pay taxes on the advertisements generated. It is necessary that all the companies and agencies using social media platforms
for advertising cooperate and follow the NRB’s latest directive. The government has the duty to not only stop capital flight but also learn from where and how the money that is being sent abroad is being generated. This is because there are high chances of money laundering, given the weak monitoring of our legal framework. Following the NRB’s directive, hopefully, there will be the necessary policies soon to regulate advertising on the social media. The central bank has given assurances that a regulatory framework would be announced soon so as to make payments for advertisements on the digital platforms systematic.
The far-flung villages in most of the districts of Karnali province constantly face a food shortage as the contractors assigned to supply subsidised food items from the Tarai and the nearest depots fail to transport them to the needy areas. A report from Jajarkot’s Barekot Rural Municipality is no exception. Whatever the crops the locals produce barely last them for six months, leaving them high and dry after that. The locals said the food depot in the rural municipality has already run out of stock.
The shortage of food is a perennial problem the central government has not been able to solve. Most of the foodstuffs are transported to the remote areas with the help of mules and horses, which cannot carry adequate amounts of food required in the rural areas. Considering these facts, the provincial government needs to work out a long-term plan for food security and food sovereignty. Instead of depending on food coming from outside, the locals should be encouraged to grow the crops that can easily adapt to the local climate. Food sovereignty is a concept under which the local people develop the habit of consuming the food that they grow locally. This will make them self-reliant on the food that they need.