Greek Online Advertisers Avert Tax, For Now
The IAB Greece and its larger counterpart IAB Europe kept the pressure on Greek lawmakers, fighting the proposed tax through PR and an ad campaign, but they fear the tax proposal could resurface.
Online publishers and advertisers in Greece have dodged a tax bullet, at least for the time being. An item in a broader pension bill that would have slapped a 21.5 percent tax on online ad sales made by news media outlets has been removed. The Interactive Advertising Bureau Greece and its larger counterpart IAB Europe kept the pressure on Greek lawmakers, fighting the proposed tax through a PR and ad campaign.
It appears to have worked, as the tax proposal was stripped from the bill, which was voted on yesterday. However, though it is a long shot, the tax language could worm its way back into the law as an amendment.
“We consider this to be an important victory,” said Constantine Kamaras, founder of IAB Greece and vice chairman of Greek online publishing firm 24 Media. “We avoided a potential calamity that would have significantly slowed down the economy,” he continued.
However, while Kamaras called an amendment reinserting the tax “extremely unlikely,” he did not rule out the possibility of the Greek online ad tax resurfacing in the future. “We are certainly concerned that there may be, in the future, a different form of tax on Internet advertising. We must stay very much vigilant.”
Amendments must be made by July 13, according to Kamaras.
The proposed tax would have funded pensions for journalists, and applied to online news outlets covering political, social, economic, cultural and sports news, in addition to reviews, interviews and discussions. It mimicked a similar tax applying to traditional media outlets.
“At IAB we’ve been fighting for years for this not to be replicated in digital media,” said Kamaras. According to IAB Europe, online ad revenues in Greece reached €68.5 million ($83.5 million USD) in 2009, €40 million going towards search ads and €28.5 million spent on display ads. It’s that display ad market that would be hit by an online ad tax. “We consider [the tax] to be extremely shortsighted,” Kamaras said. “It penalizes one of the very few sectors that is growing healthily.”
The IAB Greece does not have the resources to lobby Greek lawmakers directly, so it was reliant upon the IAB Europe to ensure the tax opposition campaign got attention. According to Kamaras, the IAB Europe placed ads online and in European trade publications to raise awareness of the tax issue.
Kamaras suggested that pressure from across the EU may have influenced the Greek government’s decision to remove the tax proposal. Because the country’s economy is in such dire straits, and the government needs financial assistance from the international community, he said, “The government is very, very sensitive to anything the international media says about it.”
Still, Greece’s economic status and the need to raise funds could give legislators a reason to propose the tax in the future.
Then there’s the journalists’ lobby. According to Kamaras, journalists are protesting the removal of the tax, since it would have funded their retirement pensions. Kamaras said the IAB will ease its tax opposition campaign, at least temporarily, so as not to stoke that protest fire.
Follow Kate Kaye on Twitter at @LowbrowKate.
