CANBERRA: A levy on digital technology giants, including Google and Facebook, may soon be a reality in Australia, according to multiple media reports, as the Federal Government puts a “digital tax” in play as part of legislative negotiations.

Australian Treasurer Scott Morrison indicated earlier this month that he would move forward with new proposals for taxing multinational digital companies within weeks.

“The next big challenge is to ensure big multinational digital and tech companies pay their fair share of tax,” he said in his Budget Day speech. Morrison also accused digital and social media companies of “ripping out a big part of our tax base” earlier this year.

According to a report by the Sydney Morning Herald this week, influential independent senators are in favour of a levy on international technology companies as part of a negotiation to pass the Federal Government’s A$35 billion company tax cut proposal.

The full suite of policy options has not yet been released by the government, but independent senators confirmed their support for a crackdown on digital technology companies to Australian media.

Among policies reportedly floated is an EU-style “interim measure” to implement a 3% tax on all advertising revenue from “globally significant enterprises” with annual turnovers of more than $1 billion.

Any new initiative “would look more like a sales tax through a GST-style levy paid on advertising”, the story notes. Whether that levy was passed on to advertisers would be up to the companies affected.

Both Google and Facebook are hugely influential advertising players in Australia. Mumbrella noted that large-scale publishers such as NewsCorp and multinational programmatic media houses may also be affected by any such proposal.

Last year, Google reported revenue of A$1 billion in Australia, including $604 million from advertising. The global tech giant paid $37 million in tax on a total profit of $125 million. At Facebook, revenue from the Australian market increased to $476.8 million in 2016, but the social media powerhouse reported a loss of $9.6 million after settling previous debts with the Australian Taxation Office.

Sourced from Sydney Morning Herald, Mumbrella; additional content by WARC staff