For yet another year the special 20% tax on television advertising – initially due to be imposed in 2011 – will be delayed following an amendment that was added to the draft legislation, “Unified Property Tax and Other Provisions” by finance minister Giannis Stournaras and state minister Dimitris Stamatis.
The controversial decision comes at a time when advertising profits for November are up €23.55% compared to the same month last year. The total amount spent on TV advertising last month was €58,763,703 up from €47,563,076 during the same period in 2012. Meanwhile the large media groups in the country have €818 mln in obligations and loans worth €579 mln. Loans which no other type of business would be able to secure given the same balance sheets and which, in the end, will add to the taxpayer’s burden.
The special 20% tax on TV advertising was initially legislated for in 2010. However it’s implementation was postponed by successive amendments first to 1/1/2012, then to 1/1/2013 and finally to 1/1/2014. Now it will be postponed again because, according to the most recent amendment, “the current dire economic climate has negatively impacted the financial situation of all of the involved parties and businesses exploiting TV frequencies as well as that of advertisers and advertising agencies.”
“The factors necessitating the postponement of the implementation of [the tax on TV advertising] have not subsided, but rather are continually being exacerbated and as a result its implementation from 1/1/2014 is likely to create additional problems regarding the viability of television broadcasters and advertising companies, with the danger that hundreds of jobs would be lost together will significant revenue for the state and social security funds with all that would entail for social cohesion and the country’s fiscal situation,” according to the accompanying explanatory report. It adds, “due to the above it is deemed appropriate that the implementation of the measure be postponed for another year.”
In the report by the General Accounting Office there is no estimation of the how much revenue will be lost in 2014 due to the postponement of the 20% tax on television companies. It is however made clear that the resulting gap in the budget will be made up by revenue from other sources.
In short at a time when most other parts of the economy and society are being taxed to the hilt, for yet another year the finance ministry has shown a remarkable sensitivity to the economic difficulties faced by media barons.