30/05/2016
The Greek Government is planning to impose a 5% tax on broadband connections and a 10% tax on pay-TV, a charge that will be levied on all Internet connections, whether professional or private, through use of PCs, tablets, mobile phones and other devices.
Applying this measure to Internet connections will create serious obstacles for citizens and mean unjustified costs for start-ups and delays in efforts to cut red tape in the public sector. It is a measure that seems to be at odds with one of the most basic priorities of the Commission and Parliament, since the Commission is now unveiling new proposals for the Digital Single Market.
Such measures may also have an impact on the spread of the Internet in those countries in which they are implemented, creating technological disparities, since the Internet offers unique opportunities to businesses and citizens.
In view of the above, will the Commission say:
1. Is this measure consistent with the overall strategy for the Digital Single Market being drawn up by the Commission?
2. What is the average economic impact of delaying the spread of the Internet in an EU Member State?
3. What is the average economic impact on a European citizen of not using the Internet?
Answer given by Mr Oettinger on behalf of the Commission
These measures have been introduced by the Greek Government as part of the European Stability Mechanism (ESM) financial assistance package and are consistent with the EU regulatory framework. The impact on the take-up of broadband (and therefore on Digital Single Market's objectives) of those measures seems however limited and the Commission has made available instruments like the European Structural and Investment Funds and the European Fund for Strategic Investment to incentivise the construction of fast broadband networks.
Given the general downward trend of prices for broadband subscriptions, any effects from such a tax are likely to be only temporary. Although cost has been cited as the only factor for not having an Internet connection at home by a quarter of the households without an Internet connection in the period 2013-2015, the percentage of households without an Internet connection has been going down from a third in 2013 to one quarter in 2015. Based on a study on OECD countries(1), we can estimate that a 5% increase in prices would lead to a 2.1% fall in demand.
According to a study from the Commission's services the economic impact for Greece in the long run of the implementation of the fast broadband targets (100% coverage at 30 Mbps and 50% take-up at 100 Mbps) of the Digital Agenda for Europe is estimated to be an increase of around 1.5% of GDP.
(1) Cadman R, Dineen C., ‘Price and Income Elasticity of Demand for Broadband Subscriptions: A Cross-Sectional Model of OECD Countries’, SPC Network Working Paper 2008.
