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Levelling the tax playing field

Publishers group sees more regulation of tech giants as key to ensuring they get paid

Toronto Star, 18 Oct 2019, TARA DESCHAMPS

As part of a series, the Star looks more closely at a new report by the International News Media Association: How to Decode the Publisher-Platform Relationship identifies seven issues as the most concerning to publishers in the digital age. Today, tax status.

Tech giants have avoided hefty fees by using countries where tax rates are low, irrespective of where their platform’s users are located. This gives them advantages when competing with publishers for advertising contracts, which once were the main source of income for newsrooms. Google and Facebook, for example, pay about 14 per cent less tax in Europe than local companies and are not obligated to fund original content or compensate publishers. Fixing such tax concerns would require legislation changes and co-operation from numerous nations. Possible solutions: á Adopt policies that improve monetization.

The International News Media Association (INMA) believes monetization

could be improved if tech giants give publishers a break on software licensing fees and develop automation to cut recurring costs of creation and publishing that platforms could also deploy for profit in other sectors. INMA also sees increased regulation of tech giants as key to ensuring publishers are not undervalued and underpaid. The organization notes that Canada, France and Australia have already pledged to or introduced government funding for private sector journalism as a way of assisting local publishing.

In Canada, the Liberal government has earmarked nearly $600 million over the next five years for tax credits and incentives aimed at aiding news outlets that have experienced layoffs and declining profits amid the shift to digital journalism.

INMA is also watching developments stemming from June’s G20 meeting in Tokyo, where finance ministers discussed how to close loopholes used by global tech giants to reduce their corporate taxes. INMA has noted that U.S. Trade Secretary Steven Mnuchin said ministers reached a strong consensus to pursue a French-German plan to standardize a new global tax regime for the biggest tech giants.


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