Malcolm Turnbull proposes taxing Google and Facebook ads

Taxing those who buy ads is less taxing than taxing Google and Facebook

Australia's Communications minister Malcolm Turnbull has his eye on the revenues collected by multinational online ad platforms like Google.

Apparently raising a white flag on the government stopping multinationals from shipping profits offshore to avoid tax, Turnbull has floated the idea of levying Australia's goods and services tax (GST, an analog to the UK's VAT and US sales taxes) on the companies – essentially shifting the tax burden onto those that advertise with the Web giants.

Turnbull told Fairfax Media that levying GST on Google's and Facebook's Australian ad sales would “recover very substantial amounts of revenue”.

“The modest amounts of company tax both companies pay in Australia has been a matter of great concern, here as well as in other countries”, Turnbull said.

If estimates of the advertising booked with Internet multinationals at AU$2.4bn are accurate, they'd be asked to charge $240 million in GST – however, much of this would be deducted by those booking the advertisements as an input cost, so the net to government would probably be far less.

The question arose in the context of a media ownership reform debate, with Turnbull noting that Australian outlets are “under enormous pressure”, something he imagines would be relieved a little if the multinationals were under the same GST obligations as if the ads were booked with an Australian company. ®

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