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Monday, 25 June 2018

House is shopping around legislation to tax social media ads

LEGISLATION WATCH- House is shopping around legislation to tax social media ads: A draft law to tax Egyptian advertisers for their social media spends apparently exists and is already floating around in the House of Representatives, MPs tell Egypt Independent. The proposal would tax both paid and unpaid ads (how that last bit would work is beyond us) on social outlets including Facebook and Google, House ICT Committee deputy chair John Talaat said. “The draft law is still under discussion and people are still working out the methodology of its application and implementation,” he said. Talaat claims the bill has wide support in the House.

Gov’t and House are on the same page on this: Government sources had told us earlier this month that the Tax Authority is looking at imposing VAT on online ad buys and e-commerce transactions. In parallel, it is looking at ways of charging VAT on online ad sales by both domestic players and global giants such as Google and Facebook. “Facebook and social media websites don’t have platforms in Egypt, so the government has found it necessary to impose their control and collect taxes from Egyptian companies which choose to advertise on those websites,” says Talaat.

Yeah, paying taxes is not fun. But as longtime readers know, the only thing that bothers us more than shelling out are the cheats who don’t pay their share. The online set is grumbling about the Madbouly government aiming to collect VAT on online purchases. We don’t understand why the special snowflakes who hawk their wares online should be VAT exempt in the first place, and neither does the US Supreme Court. The top court in the United States ruled last week that “internet retailers can be required to collect sales taxes even in states where they have no physical presence.” The same logic, we think, should also see multinationals such as Google and Facebook charging VAT on taxable services in Egypt.

This isn’t the first time the House has maneuvered to get hands on social media activity: Earlier this month, our representatives passed the second part of the Press and Media Act, which subjects social media accounts with more than 5k followers to new regulation.

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