Anyone who has even remotely been paying attention will realize that Google has made a fortune online. The reasons for Google’s unprecedented success are many, but there has also been a certain amount of luck involved.
Google got into the search engine business back in the Wild West days of the Internet, when there was virtually no regulation or taxation to be found anywhere online. So in one sense, it’s kind of like Google stumbled onto a gold mine in a new territory that had previously not been explored.
But these days everyone is online, and there is hardly a nook or cranny of the Internet that has not been exploited for profit. And, of course, all those big profits quickly attract the attention of lawmakers keen to get their share of the pie. Enter: taxing Internet businesses.
So taxing online revenue is certainly nothing new at this point in the game, but the government of the United Kingdom is considering a new law that would effectively tax Google and other online search engines to display content sensitive advertising.
Slashdot.com is reporting that Her Majesty’s Government is busy crafting a new proposal to tax online advertising revenue gained by search engines like Google, Yahoo and Ask.com. And in the case of Google, we could be talking about an enormous amount of revenue here. Sources inside the government say that the Department of Business, Enterprise and Regulatory Reform are behind the proposal, which could theoretically wind up costing Google and other major search engines millions of pounds.
But not all UK politicians agree with the idea of taxing Google, Yahoo, et al. Critics of the proposal are already pointing out that the concept of levying an extra tax on a high-growth industry during a recession is foolhardy. Other critics go so far as to call the proposal fiscally irresponsible to the point of madness.
Still, the bill making its way through the lower house does have its defenders, and some UK politicians would like nothing better than to see a type of “windfall tax” levied on all advertising dependent search engines online. But even though they are very quick to say they want the tax on “all” search engines, is very clear that it is Google they are going after. After all, Google has the “deep pockets” necessary to pay enormous amounts of tax revenue. Upstarts such as ask.com don’t.
If the UK law was to pass — and that’s a big if — it would open up a whole legal can of worms, wherein the US might find itself taxing search engines for “windfall profits,” and other nations would likely follow suit. The good news for Google? Legal experts are skeptical that the proposal will ever make it to a vote. But you never know in politics; anything can happen.
In reality google is the GOD of intenet world
Comment by Nora — May 29, 2009 @ 9:45 pm