MPs call to impose tax on social media and Google

CAIRO – 28 May 2018: Members of the Parliament call to impose a tax on advertisements posted on social media websites and Google as it would be an important source of revenues for the treasury.

MP Mustafa Bakri stressed that social media platforms such as Twitter and Facebook as well as Google earns millions from posting ads and making use of the Egyptian online news industry, but they find many ways to avoid paying taxes; Bakri criticized the absence of legal mechanisms to impose taxes on them.

In the same context, MP Mohamed Fouad referred that tax collection poses a great problem as most of social media websites do not have representative offices in Egypt; hence, they are not subject to Law No.9 of 2013 for the stamp tax.

Fouad further remarked that the Parliament should draft a law to regulate and impose tax on the digital advertising market on social media and Google to get tax revenues from the internet.

Total advertising in the UK managed to grow by 4.6 percent to record £22.2 billion ($30.6 billion) in 2017, according to the latest report from the Internet Advertising Bureau (IAB) UK and PwC.

Although digital advertisements grew by 14.3 percent to record £11.55 billion in 2017, a scant amount of that spent went to national and regional news websites and magazines; journalism is getting an ever-shrinking slice of the advertising pie.

The report has shown that digital giants Google and Facebook have both dominated the advertising market; Google alone takes an average of 90 percent of UK search advertising, making at least £5 billion in the UK.

According to the report, display advertising comprises £3.95 billion of total UK advertising; Facebook is considered to be the biggest player when it comes to online display advertising in the UK, making an excess of £1 billion.

This report was issued a year after Press Gazette, a British media trade magazine, launched its “Duopoly” campaign to stop Google and Facebook from destroying journalism.

Though this growth in digital advertising draws reasonable comfort for the industry of digital marketing, it fails to compensate the downturn across the board.

This growth negatively affects the print news industry, which is moving toward paid online subscriptions in an attempt to escape from the domination of tech giants.
Stephen Woodford, chief executive of the Advertising Association, told Press Gazette, “These very impressive ad spend figures demonstrate the strength and resilience of the UK advertising industry over the course of 2017.”