Internet and pay-TV taxes shock market

The telecommunications market has been stunned by the agreement between the government and the country’s creditors about taxing the Internet and pay-TV. Market professionals note that the agreement for a 5 percent tax on every Internet connection and a 10 percent levy on every pay-TV subscription will both damage growth and be impossible to implement.

The level of the taxation is expected to lead to a further slowdown in the expansion rate of information and communication technologies in Greece. The same is likely to happen as regards pay-TV penetration.

More importantly, the tax will lead to market distortions, as companies offering combined telecom services (double- or triple-play) will start imposing high charges for phone services and low charges for services on which the levies will be imposed, to reduce their tax bill.

Well-informed sources further state that the government has not even examined the application and consequences of those measures.