Israel is planning to levy taxes on search engine companies in favor of local content publishers. The Financial Times reports that Israel lawmakers have finished drafting a bill that requires search engine companies to pay taxes for what they earn when they run other publishers’ content.
Israeli Content Makers are “Suffocating”
The bill proposes to levy 7% of earnings from online advertising, which search engines must pay to the local content providers. The proponents of the bill did not name specific companies, but the bill is said to be nicknamed the “Google Law,” indicating that Google will be one of the companies taxed by the Israeli government should the bill be passed.
Sponsors of the bill have noted that Israeli content marketers have been generating much online traffic – relative to the size of Israel’s population. This, says Labour party member Erel Margalit, is “suffocating” the content marketers, which in turn makes it difficult for them to earn a living.
The first hearing for the bill is set sometime in February or early March. According to reports, more than 30 of the 120-seat Knesset parliament support the bill.
“Favorable, Not Hostile Business Climate”
The outlook of this bill being passed as a law is not clear, but the prime minister of Israel, Benjamin Netanyahu, has given a statement that somehow shows he does not support the bill. According to him, Israel needs to “ensure a favorable – and not hostile – business climate for these companies.”
Meanwhile, Google has managed to avoid or water down similar legislations in other countries. “We believe that innovation and commercial cooperation is a better way forward than new legislation,” says Google spokesperson Paul Solomon. He further explains that Google works with publishers to create new technology that increases their traffic, revenue, and engagement rate. Given their success in other countries and the seeming lack of support for this bill, it looks as though Google and its competitors might be able to avoid this levy. We’ll keep you updated on the status of the bill as more news arrives.
Meanwhile, we’d be glad to help you devise a content marketing plan that maximizes your current resources. Talk to us today to get started.