The Greek Tragedy Act III

By Global Tax Weekly

It’s not easy to find positives where Greece is concerned, but this benighted country, which could be teetering on the brink of economic oblivion once again, came out surprisingly well in a recent report on the taxation of ICT goods and services – computers, cell phones, tablets, internet access and an array of other digitally-delivered services – around the world. While other industries continue to contribute more taxes to help pull Greece out of its fiscal Slough of Despond, the ICT sector is getting away rather lightly according to the report by the Information Technology and Innovation Foundation, which found that Greece is the only OECD country to feature in the top-20 of its league table, with an overall tax and tariff burden of less than 10 percent. Tragically, but at the same time unsurprisingly, the countries with the highest “digital drag” – those with the largest tax burdens on ICT goods and services – are mostly lower- or middle-income countries located in Africa, South Asia, and South America, with sub-Saharan nations prominent among them, i.e. those countries that would benefit the most from the productivity gains accruing from greater use of technology and the resultant economic growth. It is estimated that in countries with the highest tax and tariff rates on the ICT sector, annual GDP-per-capita growth is reduced by between 0.7 and 2.3 percent. The report points out that governments like to slap tariffs on ICT goods in the vain belief that it will spur domestic production of these goods. All that tends to happen as a result of such policies though, is that the local population is deprived of choice and forced to pay through the nose for sub-standard products. That’s progress!

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