Election campaigns on social media questionable
KATHMANDU, NOVEMBER 15 : Social networking sites, especially Facebook, are flooded with adverts related to the candidates vying for the November 20 elections. They are busy making their publicity through Facebook, Twitter, Instagram, TikTok, and other social networking platforms. In today's digital era, capitalizing upon these IT-enabled platforms for election campaigns is justifiable. But doing so by overlooking the related legal provisions is, of course, not
Most of the wannabe lawmakers are found to be neglecting the existing laws as well as the fiscal discipline pertaining to online advertisements This could be safely ascribed to poor oversight of the state mechanisms and legal loopholes. According to the Meta Ads Library Report released by Meta, the mother company of Facebook, a total of 5,560 Facebook pages and profiles have been used for election advertisements in the past one month. This number is of the paid ads made only for election and political-related agendas regarding the upcoming elections. As shared by the Meta details, US dollar 67,036 have been spent till this afternoon for the online ads of election-related content.
According to the Nepal Rastra Bank, the transactions of election ads taking place on social networking sites are strictly questinable. Executive Director of the Foreign Exchange Management Department of the NRB, Ramu Poudel, said that any individual in the country who is issued a Dollar Card can spend up to only 500 US Dollar in a year. “ However, the amount of money spent by the candidates foe election campaigns has exceeded this limit,” Poudel added.
Policy-level question
A government study shows that there is a loss of a huge amount of revenue as the social sites providing their services in Nepal have not come under the tax ambit. As per a report prepared by carrying out a study regarding the increase in revenue scope-2079 by the Revenue Advisory Committee, the trend of advertising on social networking sites has gone up all of sudden as of late. With this, such social sites are taking away billions of rupees annually from Nepal. After the Revenue Advisory Committee suggested that social sites have been taking away huge amounts of foreign exchange from Nepal and they should be brought under the tax ambit, the government in its budget for the current fiscal year 2079/80 has mentioned bringing such transactions under the tax ambit.
Similarly, the Director General of the Inland Revenue Department, Ritesh Kumar Shakya, said an arrangement related to digital service tax has been made for the first time through Economic Act-2079. "Two percent digital service tax and 13 percent VAT has been imposed on digital services available to customers in Nepal." "Some companies have filed applications and are in the process of registration and some have shown interest in the registration, he said.
Shakya mentioned that the Department has launched a digital portal for the registration of the companies based on social sites and the internet that have been providing service in Nepal. There are 13.3 million Facebook users in Nepal as of 2022, says the report referring to data from dataportal.com. Similarly, the advertisement income per advertiser on Facebook reached 40.96 US dollars in 2021. Facebook has been making an income of more than six billion rupees annually for viewing advertisements by Nepali Facebook users.
Which candidates spent how much?
Advertisements on social networking sites are pitched in such a way that the information reaches only a targeted group of certain geography, gender, and age group. Access to such boosted posts is based on the money spent on the same. The candidate hopefuls of upcoming parliamentary elections here are leveraging the social networking sites and running advertisements for their targeted constituencies. The statistic of Meta shows that Shree Ram Gurung, a candidate for a House of Representatives (HoR) member from Kathmandu constituency no 5, spent the highest amount- USD 3,125-during a month for boosted posts.
Similarly, Sushant Shrestha, who is contesting to become a HoR member as an independent candidate from the same constituency has already spent USD 2,238 for the paid advertisement about his candidacy. CPN (UML)'s Kiran Poudel, HoR member candidate from Kathmandu constituency no 1 has spent 1,350 USD so far.
Dr. Suresh Basnet, a candidate for the HoR from Bhojpur constituency no 1, has paid USD 1,800 to boost his Facebook account. Likewise, USD 1,268 has been spent to boost the Facebook page named 'Let's reelect Development Personality Ishtiyaq Rai, Let's make Nepalgunj prosperous', according to Meta's statistics.
To boost the posts posted by the Facebook page of Rastriya Swatantra Party's Ganesh Parajuli, HoR member candidate from Kathmandu constituency no 7, USD 937 has been spent. Province Assembly member candidate from Kathmandu constituency no 5 (2) Jagannath Lamichhane has spent USD 904 to boost his Facebook page. He is contesting as an independent candidate.
In the Facebook account run in the name of Som Prasad Pandey, USD 842 has been already spent while USD 717 for the account named after Pradeep Poudel, USD 678 in the name of Anup Bohora, USD 666 in the name of Ranju Darshana and 652 for Upendra Yadav have been spent. To boost the 'Why Nepali Congress?' page on Facebook, USD 535 has been spent and USD 535 in the name of Rabindra Mishra, the Meta statistic unveiled. There's a 'No, Not Again' campaign doing the rounds on Facebook. The Election Commission of Nepal had written to the Nepal Police to identify and bring to book those running that campaign. A case was registered against this campaign in the Supreme Court.
The highest court in the country ordered not to take any action against this campaign. In India, 18 percent GST and 2 percent TDS are being levied on online advertisements. Google and Facebook are registered in Bangladesh and these companies have been paying 15 percent VAT. Towards this, if only 15 percent of tax was levied on income earned from the boosted posts (online advertisements) from Nepal, over Rs 9 billion would have been collected from the national coffers. However, only a nominal amount seems to have been paid as tax for the total amount earned.
