In recent years, social media
platforms have become a significant source of income for many companies as they
generate revenue through advertising and by collecting data from users. While
these platforms, which are owned by foreign companies, may engage in the
Kingdom’s economy as they rake in revenues, they are not required to report this
income to the government. Is it time for Jordan to implement a tax on social
media platforms for the income they garner from advertising and user data
collection?
اضافة اعلان
The idea of taxing social media
platforms is not new. Several countries have already implemented such measures,
including France, Italy, and Spain. The rationale behind this move is that
social media companies generate significant profits from their operations in
these countries, but do not pay sufficient taxes. By imposing a tax on these companies,
governments can ensure that they contribute their fair share to the economy.
High user numbers, high
revenues
In Jordan, social media platforms
are widely used by the population. According to a report by Data Reportal,
“there were 9.95 million internet users in Jordan at the start of 2023 when
internet penetration stood at 88 percent and a total of 8.61 million cellular
mobile connections were active”. In addition, based on a Hootsuite report, 74
percent of Jordanians use social media, with Facebook being the most popular
platform.
By imposing a tax on these companies, governments can ensure that they contribute their fair share to the economy.
This high-usage rate means that
these companies are generating significant revenue from advertising and data
collection in Jordan. However, there is currently no mechanism in place to tax
these companies for their operations in Jordan. This means that they are not
contributing to the country's economy despite benefiting from its market and
resources.
Why the social media tax is a
good idea
Implementing a tax on social
media platforms would have several benefits for Jordan's economy. Firstly, it
would generate additional revenue for the government that could be used to fund
public services such as healthcare and education. Secondly, it would create a
level playing field for local businesses that are currently at a disadvantage
compared to international companies that do not pay taxes in Jordan.
There is currently no mechanism in place to tax these companies for their operations in Jordan. This means that they are not contributing to the country's economy despite benefiting from its market and resources.
Moreover, taxing social media
platforms would also help protect user privacy. These companies collect vast
amounts of data from their users without adequate transparency or control over
how this data is used. By imposing a tax on these companies, governments can
incentivize them to be more transparent about their data collection practices
and provide users with more control over their personal information.
Careful considerations for tax
implementation
However, implementing such a tax
would require careful consideration of several factors. It would be essential
to determine the appropriate rate at which these companies should be taxed
based on the revenue they generate in Jordan. There may also be legal
challenges involved in implementing such measures, as many of these companies
operate across borders.
As such measures continue to gain traction globally; it is essential for policymakers in Jordan to consider this option seriously as part of broader efforts towards digital regulation and taxation reform efforts
In conclusion, taxing social
media platforms for their income from advertising and data collection could
have significant benefits on both the economy and user privacy. However,
various factors must be carefully considered before implementation can take
place effectively.
As such measures continue to gain
traction globally; it is essential for policymakers in Jordan to consider this
option seriously as part of broader efforts towards digital regulation and
taxation reform efforts aimed at ensuring fairness across all sectors of society
while promoting economic growth.
Hamza Alakaleek has graduate degrees in International Political Economy and International Business Law from Yarmouk University and University de Montreal with focus in internet of things, artificial intelligence, and data protection.
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