PPC Tax on the horizon in UK
Well the tax folks were never kind or reasonable anything that generates revenue
Looks like the UK is going to levy a tax on PPC revenue
Search engines, download giants and broadband users could face levies as ministers seek to fund public service TV and the roll-out of broadband.
A number of controversial options are being considered by the government about how to raise money to ensure the future of 'Digital Britain', it is understood.
This could see Google hit with a multi-million 'per click' tax to help make sure programmes like news and current affairs continue to be made on Channel 4.
Money from the tax could also go towards paying for Government's plans to make sure every single home in the country has access to broadband by 2012.
Another option, considered less likely than a search engine tax, is to start taxing broadband use, a fee that would undoubtedly be passed on to customers.
This could see internet providers like BT taxed for the amount of megabytes used by their customers, which inevitably would end up on people's bills.
Another idea, said to be less well formulated, is a way of raising cash by issuing a charge for downloading on services like iTunes,
Insiders say that the tax on search engines would be the most politcally 'tenable' of the three ideas as it would less directly hit consumers in the pocket.
It is suggested as well as Google and Yahoo, a search engine tax could also be extended to things like YouTube, which people use to find information.
Sources say these three options - search engine tax, broadband tax and the download tax, have been discussed by officials at two government departments.
Both the Department for Business, Enterprise & Regulatory Reform and the Department for Culture, Media and Sport are said to have looked at them.
Any introduction of new taxes would also have to be signed off by the Treasury if ministers decided to back any of these options.
Communcations minister Lord Carter of Barnes, fronting the Digital Britain review, has already made a commitment to ensure universal access to broadband.
The Government is also looking to protect the current level of non-BBC public service programming like the news, which is likely to cost £150million a year.
The new ideas come as initial proposals to fund public service broadcasting are getting bogged down and might not raise enough cash.
Plans to help Channel 4 by allowing it to set up a joint venture with the BBC's commercial arm have been faltering and may not create enough value.
Another suggestion that C4 could merge with Channel Five also looks unworkable, prompting ministers and officials to look at less obvious ideas.
Broadcasters have been hit hard by the success of internet advertisers like Google and also by the fragmentation of audiences caused by digital TV.
Commercial pressures mean that less popular shows like the news and current affairs programmes could disappear on non-BBC channels unless protected.
A search engine tax would likely be based on a percentage of adverting revenues and amount of clicks received by the company in the UK.
Google has UK revenunes of £1.5bn most of which are from advertising. But many criticse the damage it has had on UK companies.
But critics claim the Goverment would be punishing success if it targeted that and other search engines with a new levy.
Others are angry that on top of the licence fee public other people's money will once again be used to prop up public service broadcasting.
Some point out that print media has played a key part in driving search engine success, but despite its struggles is not getting any hand-outs..
Experts admit the three options of taxing broadband use, downloads or search engines are riddled with difficulties about how you enforce them.
A senior source said: 'An attempt to tax Google is a possibility. But it is a very long shot if it is possible to do that.
'Given it has sucked so much advertising from the rest of the world, this is an opportunity for them to put something back albeit forcibly by Government.'
He added that Google will complain it is 'tax on their success' and that it is 'fundamentally anti-business'.
Conservative MP, John Whttingdale, the chair of the culture, media and sport select committee, was opposed to all of the idea of a 'windfall search engine tax'.
He said: 'I have never been in favour of levies. I just don't like the idea of extra tax anyway.
'If you charge Google it would be the equivalent of a windfall tax. Here is a company making lots of money so lets slap a tax on them.'
Philip Davies, a Tory MP who also sits on the parliamentary committee, added: 'They are looking at everything apart from the thing which is shooting them in the eye, which is the BBC.
'There's piles of money sat glaring them in the eye. But they are trying to everything to avoid doing the most obvious thing off all.'
He added: 'The newspaper industry is suffering just as much as the broadcasting industry and at every level.'
A spokesman for Google said: 'It seems strange to come up with a new tax proposal a week after the budget.
‘Especially an idea that was rejected in France because it would have penalised a growth industry in the middle of a recession.
'The Government should be encouraging companies who are creating jobs not punishing them with higher costs.
‘What's more this proposal would hit commercial broadcasters and newspapers who also make money from online advertising.'
While money raised could be used to help pay for the roll-out of universal broadband, insiders believe it is more likely to go to protect public service TV.
Chancellor Alistair Darling has already outlined plans in his budget which give the broadband industry money from the BBC's underspend on digital switchover.
An estimated £250million which the corporation is unlikely to have spent by 2012 in helping people make the transition will go towards broadband for all.
A Spokesman for the Department for Business, Enterprise & Regulatory Reform said: 'There are no plans to impose new taxes.'
As we all know the UK Government is almost bankrupt due to their financial woes
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