Accelerating adoption of a digital intermediary tax

Abstract

The role of the digital platforms as intermediaries to the news has deeply changed the media environment. The chapter focuses on the economic threats to media pluralism, related to the concentration of the market and the disruption of the news media industry, resulting from the digital platforms’ business model; and argues for the role of fiscal policy in redistributing part of the tech dividend and in supporting media plurality. The policy proposal is a digital tax designed to support news media viability and media pluralism. The need for a reform of international corporate tax rules to tackle tax avoidance in the digital economy has been largely debated at OECD and at EU level, with different proposals of a digital tax; less attention has been given to the use of the revenues raised by such a tax. We argue that earmarking part of the digital tax’s revenue to sustain professional journalism is a way to finance a public good that, in the new digital environment, risks being undersupplied. Public media policies should be carefully designed to guarantee fair, objective and non-discriminatory distribution of the resources, to avoid media being captured by political interests. The search for resources to fund the post-Covid economic crisis in most of the EU countries could act as an accelerator of the adoption of a digital tax; to use part of its revenue to support media pluralism may be a structural way to counteract the ‘infodemic’.