A levy of 2%-6% imposed on smartphones, tablets, laptops, desktops and all electronic storage devices raise the total taxes on these devices at 26%-30%. Thee levy is to benefit “third parties”, holders of copyright.
A government amendment imposes a 2% tax on purchases of smartphones, laptops, desktops and USB sticks, a tax the government justified as “reasonable pay” in favor or recipients of intellectual work. The amendment introduced by culture Minister, Lydia Koniorodu, passed yesterday, in a Parliament voting. And triggered an outrage.
It was known already since summer 2017 that such an additional tax will be imposed, however, the original legislation foresaw that it would affect all computers and mobile phones with a central memory of more than 4 Gigabytes.
In the amendment passed on Tuesday, there are no exceptions. It should be noted that the extra tax has been imposed on tablets, laptops and desktops since summer last year, provided their central memory was above 4 Gigabytes. With the amendment this 4-gigabytes provision has been scrapped.
The new Levies
- 2% on all tablets, smartphones, laptops, desktops independently of memory capacity.
- 4% on photocopy machines, scanners, photocopy paper and hard discs of up to 1 TB.
- 6% on devices recording image and sound as well as electronic storing discs of more than 1Tetrabyte (TB).
Taking into consideration that all these devices are subject to 24% Value Added Tax, the total tax to burden them will be between 26 and 30 percent.
The purpose of this levy is to collect 100 million euros that will go to the so-called “copyright holders” like songwriters, singers, film makers etc in Greece.
- 55% of the levy will go to creators, 25% to performers and 25% to producers of sound and image.
Immediate was the reaction by the Greek Association of Information technology & Communications (SEPE) that spoke of an “unfair” tax against “growth and competition, outside the European reality.”
“SEPE expresses its strong opposition on the reasonable remuneration of copyright and points out at the serious consequences it will bring into effect,” said in a statement.
The overall burden on the industry – mainly on importers, but also on assemblers of PCs, smartphones, etc. – is estimated at €65 million and this is 24 times higher than the possible losses, SEPE said in its statement adding that with this disproportional high tax “Greece becomes a champion of burdens in this field, with the highest “digital fee” in Europe.
Of course, the extra cost will burden consumers.
As estimated, costs are expected to be passed on to consumers. It is noted that the “reasonable remuneration” for copyright beneficiaries is set at 4% on the value of photocopiers, scanners and printers, and 6% for digital audio and video recorders, as well as for all electronic storage media USB sticks above 4 Gigabytes.
Culture Minister, Lydia Koniordou, who submitted the amendment, responded to criticism with a weak argument. “We did not have the opportunity to carry on a full public consultation on the issue as the draft Law 4481/2017 had a lot of other topics that needed to be addressed,” she said.
The amendment was included in the legislation about Migration and Asylum!
The minister added that for the PCs it is the same legislation as planned in July 2017.
In an effort to justify one more tax “in favor of third parties,” Koniordou said that “in countries with similar population as Greece, such as Austria, the total reasonable remuneration paid in 2015 was approximately €10 million, in Belgium 25 million, in Portugal 3.5 million. In the same year, the amount paid in Greece through all technical means, devices etc was 1,593,407.92 euros.”
When the new levy was introduced in July 2017, the European Commission had said it would examine whether the new tax “in favor of third parties” was conform with the bailout agreement that was to cancel taxes in favor of third parties, among others.
After the outrage, the government let know it is considering to scrap the 2% levy on mobile phones – only.
In a KTG question, the European Commission replied that the levy does not violate the bailout conditions as the beneficiaries are private third parties, in the sense not to increase public revenues or as usually “pension funds of specific sectors”.
Για την ενημέρωσή σας, πρόκειται για τέλος υπέρ τρίτων σύμφωνα με την ελληνική νομοθεσία περί εύλογης αμοιβής για ιδιωτική αναπαραγωγή και δεν συνδέεται με το ελληνικό πρόγραμμα.
— Ευρωπαϊκή Επιτροπή 🇪🇺 (@EEAthina) May 16, 2018