Law to impose taxes on social media sites positive: Press Syndicate head

CAIRO – 10 June 2018: The Head of Egypt's Press Syndicate, Abdel-Mohsen Salama, asserted on Sunday that stipulating an article in the newly submitted draft law to impose taxes on advertisements posted on social media websites and Google will be "positive".

The Media, Culture and Monuments Committee drafted a new law regulating the press and media, in which it imposes taxes on advertisements posted on social media websites and Google.

MPs call to impose tax on social media and Google
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 earn 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.

Egyptian online newspapers voiced their fears over the future of digital newspapers

Since November 2015, Egyptian online newspapers have voiced their fears over the future of digital newspapers. Youm7 Editor-in-Chief Khaled Salah published an article on November 17, 2015 about the threats the Egyptian news industry could face as enormous amounts of revenue go to Facebook and Google.



“The online news industry in Egypt and the Arab world may face a major threat from some global social media companies like Facebook and Twitter, Google, etc., which dominate major fields of the advertising market worldwide,” Salah said.



Posting on his Twitter account on June 30, 2016, Salah called on Parliament to impose taxes on Facebook and Google ads.



A number of U.S. media giants formed a coalition under the title “News Media Alliance”, as the two companies dominate 70 percent of digital advertising industry.


Being reachable and accessible for millions of people worldwide, the two companies managed to pull a big share of the online ads without paying taxes.

UK digital marketing makes £11.5B, threatens news industry
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 90 percent of UK search advertising, making at least £5 billion on this 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.”
“To see ad spend hit the £6 billion mark in Q4 is a very encouraging result, as is the prediction that we will see 10 years of continued growth through 2019,” he continued.


Woodford added, “The results also reflect wider trends within the UK economy over recent months, with inflation at its lowest for a year, reducing pressure on real wages, strong employment statistics and the recent upgrade by the IMF of its economic growth forecast for the UK for this year.”