Farewell to an Advertising Tax in GR

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Farewell to an Advertising Tax in GR

Once upon a time, the association of journalists was setting up a lottery at the end of the year, named “Lahio Syndakton”. It was perhaps the most famous lottery and the gains were apartments or even blocks of apartments, that in the sixties incarnated the absolute symbol of social evolution, the dream of every family. Then at the end of the sixties, a military coup took over and gave an end to the lottery, to issue a state one exactly at the same period, the end of the year. To compensate journalists and in hope of building favorable feelings among them, gave birth to “Angeliosimo”. From then on, anyone that needed to advertise (the industry was at its infancy at the time), had to pay a 20% levy on top, that was funding the pension scheme of journalists. But … not every journalist was accepted to the pension scheme, but this is a different story, having to do with the controlling mechanism that the junta tried to put in place.

The practice of a professional group to get its hand deep into the pockets of another group was not acceptable any more by the EU regulations and had to be stopped. Greece was forced to comply also to this point (among else), in order to secure the financing of its economy. Thus, the law provision as voted by the Parliament, is that Angeliosimo gets a deadline of enforcement till the end of July 2016.

Rumors: As taxes are only added and never abolished, there is a speculation that a new tax will be imposed. But there is nothing official on this.

Consequences:

As we showed in a previous article, supply pricing is highly elastic. Thus in Jan 2015 that a TV tax was imposed, the channels reduced prices and the overall result didn’t exceed 4-5% in gross price increase. The reverse process is expected on TV, if no other tax is imposed and the average year will close with a slight CPR increase vs.2015 of 4-5%.

In Sunday Newspapers, where circulations decline fast (18% in Q1 of 2016/ No paper was exceeding the 100,000 circulation mark), the price benefit is expected to go in full to advertisers, setting the precedent for rest non-online media.

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By | 2017-03-22T11:38:54+00:00 May 13th, 2016|Advertising, Marketing, Media|