IAB Europe urges Greece to stop planned internet tax

The proposed law would see the tax payable to the journalists' pension fund, but the IAB Europe describes the plans as "short-sighted" and says it risks "causing severe damage to the country's digital future."  

The bill is expected be adopted on 8 July and will tax online advertising with a 21.5 % levy. The tax is payable for online ads on news portals that have their legal seat in Greece and produce their own news. The plans exclude other portals or forums.  

IAB Europe said that the production of high-quality content is likely to decrease under the plans, with advertisers seeking alternatives.  

The body also questioned whether the plans were financially beneficial, stating that only a third of online ad spend goes to Greek news portals.  

In 2009, the Greek online market share was less than 5% according to IAB Europe, with a 40+% growth rate.  

Alain Heureux, president of IAB Europe said: "Any tax on the internet risks negatively impacting its growth. The European Commission has identified the internet as a growth medium, which contributes positively to the overall economy and helps creating jobs. Instead, the Greek government should propose measures that would foster entrepreneurship in the Greek online sector, and create employment and additional tax revenues."  

Kimon Zorbas, vice-president of IAB Europe added: "The plan to tax advertising is understandably very appealing to the Greek government, which fights to rescue the country's finances. However, it may prove a short-sighted measure that will do lasting damage to its internet economy, an eventuality that will more than offset any immediate gains." 

Zorbas added: "Any tax on the internet – particularly the specific measures that introduce multiple market distortions – bears the risk of causing severe damage to the country's digital future. This is in stark contrast to PM Papandreou's declared intention of accelerating Greece's digital development. We will consult with the European Commission and assess further actions."