Govt invites ad agencies to promote VAT

The government is once again trying to educate people on one of the things it announced in the last Union Budget. This time around, the issue is the most talked about subject: value added tax.

The ministry of finance has invited the country's top ten advertising agencies to pitch for an awareness campaign it hopes to launch soon. The estimated advertising outlay is believed to be Rs 15 crore (Rs 150 million).

Some of the agencies who have made a pitch for the account include JWT and R K Swamy BBDO. The government had undertaken a similar exercise for the voluntary disclosure scheme in the late 1990s. That was aimed at attracting black money hoarders into the tax net.

The public education campaign is aimed at creating awareness for VAT. This is a precursor to the implementation of VAT which has been indefinitely postponed. The objective essentially is to increase the acceptance of VAT among consumers and traders.

Industry sources claim that a committee comprising senior bureaucrats headed by Prashant Pandey, joint secretary-ministry of finance, has been appointed to look after the selection process.

While the agencies have made their presentations, the shortlist is yet to be declared. The announcement is expected sometime next week.

The finance ministry and state governments had agreed to implement VAT from April 1, 2003, but stiff opposition from different industry quarters has resulted in its indefinite postponement.