A report commissioned by French president François Hollande has proposed the introduction of an Internet Tax on the collection of personal data.
The new tax would be the French fiscal authorities way of raising funds from the American technology companies that dominate its digital economy – companies like Google, Amazon and Facebook.
The report detailed various measures that the French government was taking to address the issue of what they see as tax avoidance from large overseas internet companies.
The report points out that these companies garner masses of information about their users which is then used to tailor their services to peoples’ interests or direct customized advertising in their direction. This extensive collection of personal details and the many business opportunities it provides is highlighted in the report as incredibly important, so much so, that the data was described as the “raw material” of the digital economy.
The report justified its proposed tax on data collection by claiming that users of services like Google and Facebook are in effect, working for these companies without pay, because they provide personal information that allows the companies to sell advertising. It proposes that tax rates would be based on the number of users an internet firm tracked which would be verified by an outside auditor.
The report’s authors stopped short of recommending tax rates or estimating how much money a tax law like this could potentially raise.
French policy makers are angered by the fact that Google for example, generates an estimated €1.5 billion in advertising revenue in France, however unlike many other companies, it pays almost no tax in the country.
Digital economy minister Fleur Pellerin told reporters that the government was trying to ensure “that Europe is not a tax haven for a certain number of Internet giants.”
Whilst the report is determined to do something about the status quo, it acknowledges that getting Google and similar U.S. companies to pay a bigger cut of the corporate profits in tax will be a long process because it requires international cooperation.
The French government is also overseeing discussions between Google and French online publishers who want the search engine giant to pay them a fee for links to their content.
Google has released a statement saying that it was currently reviewing the report commissioned by the French government.
However Google’s cooperation might not be the only thing that the French government has to worry about when it comes to getting the Internet Tax law passed. Proposals to generate taxes from the collection of personal data may well cause concerns in the French privacy regulator that has already expressed serious concerns over the sheer amount of personal information collected by companies like Facebook and Google.
Source: New York Times