Authorities around the world are moving to impose taxes on advertising platforms that enable users to create ads online.

Egypt has now followed suit, joining the European Union, the United States, and many other countries. The UAE is expected to

along with Morocco, Saudi Arabia, and other countries, introduce similar laws.

This means Google, Facebook, and other major and smaller advertising platforms—whether American, European, or local—will have to pay

taxes to each country based on the volume of financial transactions they generate there.

The greater the volume of transactions, the higher the taxes imposed on a company. But how will this affect advertising prices?

Online? And why is there a shift in this direction?

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Advertising campaign costs will increase

Google, Facebook, and global advertising platforms will add a VAT or fee to invoices for advertisers based in Egypt.

Just like advertisers in EU countries and other countries where these companies are required to pay taxes.

This means online advertising prices will rise for Egyptian advertisers and any organizations that manage their ads from the Egyptian market.

The cost of targeting the Egyptian market will also increase, as targeting it is no longer free for these advertising platforms—they pay fees to the authorities.

The increase in advertising and campaign costs will not be significant compared with current prices. It will simply be an additional fee advertisers must pay for

each campaign they create.

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Value-added tax on advertising

This tax currently applies to advertisers in the European Union and Ireland, where the authorities have extended it to include online advertising.

Returning to Article 67 of Egypt’s 2018 Press Regulation Law, it states: “Under no circumstances may any website run advertisements

from the Egyptian market unless it is registered with the Supreme Council and subject to the provisions of Law No. 67 of 2016 on Value Added Tax.”

I understand this to mean clearly that value-added tax will also apply to online advertising, and that is what the Egyptian market can expect.

We can expect to see the same thing in other markets and countries that impose taxes on online advertising.

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Online advertising prices are rising anyway

There is no sign that online advertising prices will fall in the future. Cheap clicks are becoming a thing of the past on Facebook, and even Google

is driving prices up. New and emerging advertising platforms offer lower-cost ads simply because demand is low.

In this market, prices rise as demand increases. As we know, companies and organizations are spending more on digital marketing.

This explains why prices are rising.

Add to that the cost of taxes and related fees, and prices are likely to rise sharply across the board, except in certain cases, such as the end of a shopping season

وتوقف Advertising campaigns run by major corporations.

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Why the shift in this direction?

There are legitimate reasons for taxing online businesses. First, online commerce is a business sector and should be subject to the same rules as other sectors. Second,

taxing local businesses while exempting foreign ones gives the latter a devastating competitive advantage and drives national and local businesses out of the market, and it is essential to

Taxation to ensure a level playing field and fair competition.

Local advertising agencies face intense global competition. Facebook and Google allow advertisers in countries where they are not subject to

taxes to create ads at very low cost and achieve good results for as little as possible. Local companies, by contrast, pay taxes and charge more for their services

as a result. This drives advertisers away from them and toward global giants, leading to the collapse of local advertising agencies and more unemployment,

while the country and its people miss out on the online advertising boom, leaving foreign companies as the only beneficiaries.

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End of article:

In this article, we explain why countries around the world are taxing Google and Facebook, and how this affects the cost of advertising campaigns.

and the role of VAT on advertising in this equation.