Tuesday, November 15, 2022

Candidates paid 67,000 dollars to Facebook in the election campaign, who is first?

Candidates paid 67,000 dollars to Facebook in the election campaign, who is first?

There is only one week left for the representative and provincial assembly elections. The candidates are busy campaigning with their cadres. Everyone continues to have their own passion and style of persuading voters. The use of modern information technology is also abundant in it. Campaigns are going on through social media such as Facebook, Twitter, Instagram, Tik Tok and other internet-based platforms. Which has become natural and necessary. But when looking for the intricacies of the 'electoral network', many knots of problems are found there. The election-focused activities going on in the network reach the financial stage. It seems that the candidates who are contesting to move to the legislative role due to the weakness of the state apparatus and regulators do not pay attention to the existing laws and financial discipline.

According to the 'Meta Ad Library Report' published by Meta, which operates the social network Facebook, election advertisements have been 'boosted' from 5,560 Facebook pages and profiles from last September to November 11 (until 12 noon on Monday). This number is for paid advertisements only on topics related to the election and political arena. According to Meta's details, a total of 67 thousand 36 US dollars has been spent by this afternoon.

It does not include Facebook ads made for commercial, educational and other purposes. Candidates in the election field are 'boosting' content on Facebook, from asking for votes for themselves to criticizing their competitors. Because of this, 'sponsored posts', i.e. election materials advertised by paying money, are found in the newsfeed. When advertising in that way, payment must be made in US dollars.

The central bank is saying that other indicators of the economy are disturbed due to the decrease in foreign exchange reserves. At such a time, asking for votes by paying dollars reduces the foreign exchange reserves and puts more pressure on the balance of payments. Most of the political parties and candidates have also put the plan to increase the foreign exchange reserves in their manifestos. But the foreign exchange reserves are decreasing because of them.

These activities have not only reduced the currency reserves and worsened the balance of payments, but also violated the law. Are all paid election ads on social media legitimate and within the scope of existing laws? Nepal Rastra Bank says, 'There is room for doubt about the transaction of election advertisements on social media.' According to Ramu Poudel, Executive Director of Nepal Rastra Bank's Foreign Exchange Management Department, dollar card facilities have been given to people living in Nepal who can spend the equivalent of five hundred dollars annually. "The amount that can be spent from Nepal is up to five hundred dollars per year. But if someone has earned 5,000 dollars a year, in that case, you can get the facility to spend more with a credit card", said Paudel. But the candidates have spent up to three thousand one hundred US dollars to advertise on Facebook. That is, how is spending more than the limit allowed to be spent through the dollar card. It can be seen from the study of the government agency that those who do not have a dollar card are forced to pay through their relatives and friends living abroad and even those living abroad help in the payment of such amount by taking a certain percentage fee. The study report on taxation in online business prepared by the Nepal Revenue Consultative Committee, which was canceled by the decision of the Council of Ministers on October 11, 2079, states, "People who pay money from abroad to purchase advertising services on social media and the related amount are paying to their relatives or friends in Nepal. "

The Election Commission has entered into an agreement with Meta to monitor the expenditure on Facebook for election campaigning. Candidates should submit the details of expenses incurred for boosting Facebook posts to the commission. According to the rules of the National Bank, the maximum limit of 500 dollars that can be paid by dollar card is violated and in both the cases where the payment is made from abroad and the expenses are submitted in Nepal, this is contrary to the existing law of Nepal.

Another policy question

A government study has shown that a large amount of revenue is being lost due to the fact that the social networks providing services within Nepal cannot come under the scope of taxation. According to the report prepared by the Revenue Consultative Committee on the study and preparation of revenue range increase, 2079, advertising on social media has increased significantly in recent years. According to the report, "The trend of advertising on social networks that are not legally registered in Nepal has increased rapidly. Such social networks are taking billions of rupees from Nepal to foreign countries every year.

Social networks are taking huge amount of money from Nepal and after the recommendation of the Revenue Consultative Committee that it should be brought under the tax regime, the government has mentioned in the budget of the current financial year 2079/80 that economic activities are being conducted inside Nepal using electronic networks from outside Nepal.

Similarly, Ritesh Kumar Shakya, director general of the Internal Revenue Department, says that through the Economic Act, 2079, the first arrangement regarding the electronic service tax (Digital Service Tax) has been made. "DST (Digital Service Tax) and 13% VAT (Value Added Tax) are levied at the rate of two percent of the transaction amount for the electronic services provided to the consumers of Nepal", Director General Shakya said, "Some companies are in the process of registration by applying and some are showing interest for registration. Tax will be levied on the business after they are registered. Director General Shakya also said that the department has opened a digital portal for the registration of social media and internet-based companies serving in Nepal.

The report of the Revenue Consultative Committee, quoting the statistics of data portal.com, mentioned that by the year 2022, Facebook has 13.3 million users in Nepal. Similarly, according to Statista, a market research company, Facebook's advertising revenue per advertiser will reach 40.96 US dollars in 2021. That income was equal to 32.03 US dollars in 2020. According to the report, Facebook is earning more than 60 billion rupees per year for viewing advertisements by Nepali users.

Which candidate has spent how much?

Advertisements are made on social media in such a way that the information reaches only the target groups including certain geographical areas, gender and age groups. Similarly, the access of 'boosted' posts is determined based on the amount spent. Candidates are advertising their areas. Mr. Gurung, an independent candidate from Kathmandu Region No. 5 for the House of Representatives, has spent a maximum of $3,125 during the last 30 days, according to Meta's details. Two thousand two hundred and thirty-eight dollars have already been spent to boost the Facebook post of Sushant Shrestha, an independent candidate for the House of Representatives from Kathmandu Region No. 5. On behalf of CPN (UML), Kiran Paudel, the candidate for the House of Representatives in Kathmandu Region No. 1, has spent 1,350 dollars. Similarly, Dr. It seems that one thousand eight hundred dollars have been spent to boost Sures Basnet's Facebook account. Basnet is a candidate for the House of Representatives from Bhojpur-1. One thousand two hundred and sixty-eight dollars were spent to boost the posts of the Facebook page named 'Vikas Purush Istiyak Rai again, make Nepalgunj prosperous'.

From the statistics of Meta, it can be seen that nine hundred and thirty-seven dollars have been spent to boost the posts placed on the Facebook page of Ganesh Parajuli, the candidate for the member of the House of Representatives in Kathmandu Region No. 7 from the National Independent Party. Nine hundred and four dollars have been spent on the Facebook post of Jagannath Lamichhane, an independent candidate for the Provincial Assembly from Kathmandu Region No. 5(2).

As for the expenses for boosting Facebook posts, there are eight hundred and forty-two dollars in the account named Somprasad Pandey, seven hundred and seventeen dollars in the page named Pradeep Paudel, six hundred and seventy-eight dollars in the Facebook post of Anup Bohra, six hundred and sixty-six dollars for the page named Ranju Darshana and in the page named Upendra Yadav. One hundred and fifty-two dollars have been spent. Five hundred and thirty-five dollars have been spent on the page named Why Nepali Congress and five hundred and thirty-five dollars have been spent on the name of Rabindra Mishra.

Likewise, the 'No, Not Again' campaign has also been boosted on Facebook. The Election Commission had also sent a letter to the police to identify and take action against the people running the No Not Agitate campaign on social media. But it has ordered that a case should be filed against it in the Supreme Court and that the campaign should not be prosecuted.

Eighteen percent GST and two percent TDS have been levied while advertising online in India, a neighboring country. Organizations like Google Facebook have been registered in Bangladesh and have been paying 15 percent value added tax. Fifteen percent VAT is levied when paying money for unregistered online advertisements in Bangladesh, while there is an additional fifteen percent TDS levied when paying money for online advertisements to non-residents. It seems that even if only fifteen percent tax can be collected on the income from Nepal, more than nine billion will be collected. Out of this total amount, only a very small amount is paid here for taxes.

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