Egypt to set mechanism to collect social media ad taxes

CAIRO – 27 June 2018: Egypt is about to reach a strategy allowing the government to implement advertisement taxes on social media websites, especially Facebook and Google. According to Parliament statements, imposing these taxes on the advertising companies will protect the Egyptian advertising market, and adjust its mechanisms.

However, it is not fully clear yet how the Egyptian state is going to collect money from advertisers, as some of the companies, which use Facebook and Google to target the Egyptian users, don’t have regional offices inside the country. One of the parliamentarians suggested that implementing these ad taxes on Facebook and Google is an option, but other options and possibilities are still on the table for further discussions.

Parliament member John Talaat, deputy head of the Communications and Information Technology Committee, said in statements to Egypt Today that implementing taxes on social media is actually applicable; however, it requires efforts by all the state’s entities to establish an acceptable mechanism.



FILE- Parliament


He affirmed that imposing these taxes will positively affect the Egyptian state by providing a huge amount of money that could be used for improving public services.

According to Talaat, the new taxes should be imposed on huge firms using Facebook and Google to post advertisements, not on individuals. “These taxes will be the first step to confront social media advertisements. Other countries developed strategies to control this kind of ads. We can do it in our country as well,” MP Talaat stated.

Tamer Abdel kader, deputy of the Parliament's Culture and Media Committee, also told Egypt Today that the Egyptian government should draft a firm law to control search engines and social media websites; otherwise, these websites will negatively impact the society. “It can turn into an online information war if we do not apply an adjusting mechanism,” Abdel Kader added.

Another Parliament member affirmed that regardless the final mechanism reached by the state; regular social media users will not be harmed in any way.

On June 23, MP Talaat affirmed the Parliament’s support to drafting a legislation that imposes taxes on advertising companies, such as Google and Facebook.

Talaat added in a statement to Egypt Today that international companies advertise their products on social media websites, noting that some countries, including Germany and Netherland, have issued laws to regulate this process and impose taxes on advertising companies.

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 monopolizing the market and destroying journalism.