[Chapter-delegates] [Internet Policy] Taxing Internet services

[Alejandro Pisanty]

Mark,

we had a similar case in Mexico in 2009 which I have described in ISOC
lists (so apologies to those who have read it.) We were able to defeat the
brunt of the initiative.

The government proposed a tax on all telecommunications services of 4% on
the bill. The Executive's argument was "because this is a highly
concentrated sector so it is simple to collect, and because this sector has
not been subject to specific taxes for a long time." (They do pay VAT and
all other taxes plus they did pay the Universal Service Fund contribution
already described by others on this list.) Industry lobbying was able to
bring this down to 3% in the lower chamber.

Members of ISOC Mexico and others in the community decided to oppose this
new tax and argued that it was incoherent with the governments's announced
purpose of increasing access to telecommunications and the Internet because
the tax would translate into higher prices (conveniently a study showed
that there would be x% less users for every y% of price increase i.e. you
have to use a figure for the demand elasticity.) We made a campaign
independent of industry's so we didn't use a "no tax" theme but rather an
"Internet is necessary" one, i.e. reflecting society's concern.

This was mostly an online-media (Twitter hashtag #InternetNecesario) that
was able to unite people from all sectors, ages, political sides, and
locations. Once it became massive it attracted the media's attention and
then the Senate's. The Senate held hearings from us and after three weeks
of intense campaign the goal was partially achieved: Internet access which
was billed separately would be tax-exempt. The actual text of the laws was
written more by industry lobbyists than by anyone else but the victory was
sweet for civil society and the technical community anyway. Plus, we
established a "don't mess with the Internet" theme that has lasted long and
served us well.

There are downsides and more details which I'll spare the list but will be
happy to share with those interested.

Yours,

Alejandro PIsanty

On Fri, Nov 11, 2016 at 1:53 PM, Mark Buell <buell at isoc.org> wrote:

> Dear colleagues,
>
>
>
> As you may know, the Government of Canada is considering implementing a
> tax on Internet service to generate funding for the development of Canadian
> content in light of declining revenues in the traditional media sector. Two
> scenarios are under consideration:
>
> 1         A tax on online content providers, like content streaming sites
> (thus, the tax in Canada has been referred to as the ‘Netflix tax’).
>
> 2         A tax on Internet service, added to a subscriber’s Internet fees.
>
>
>
> Canada isn’t the first country to consider an Internet tax. Hungary,
> France, the United States, and others have proposed – and withdrawn – a tax
> on Internet service. Other countries have implemented a similar tax,
> including Pakistan and Bhutan.
>
>
>
> An ‘Internet tax’ could have implications for the Internet and innovation.
> There are significant policy questions that need to be carefully
> considered. As we frame our thinking ourselves, we would like to hear your
> thoughts in particular on the following questions:
>
> Is a tax on Internet service an appropriate tradeoff for ensuring the
> development local, regional and national content?
>
> Would a tax on Internet services affect the end-user adoption of the
> Internet nationwide? Would it have an impact on investments in Internet
> infrastructure?
>
> How would a tax on Internet service intersect with policies to enhance a
> nation’s competitiveness in the innovation and digital economy?
>
>
>
> Furthermore, if you have had any experience with a similar policy at the
> regional and/or national level, please let us know.
>
>
>
> We look forward to hearing your thoughts on this important issue. The
> discussion will be open until November 18, 2016.
>
>
>
> Thank you,
>
>
>
> Mark Buell
>
> Regional Bureau Director, North America
>
> Internet Society
>
> Skype: mark_at_isoc
>
> Twitter: @mebuell <https://twitter.com/mebuell> and @isoc_na
> <https://twitter.com/ISOC_NA>
>
> www.isoc.org
>
>
>
>
>
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-- 
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     Dr. Alejandro Pisanty
Facultad de Química UNAM
Av. Universidad 3000, 04510 Mexico DF Mexico
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