Latvian Ministry of Culture proposes ad restrictions and possible “digital tax”

The Ministry of Culture released information on November 26 that it is considering several courses of action in response to Prime Minister Krišjānis Kariņš' (New Unity) request for a vision and concrete proposals for strengthening the integrity of the Latvian information space.

The ministry points out that with the increase in spending on digital and foreign platforms, Latvian media regulations no longer have the intended impact. The regulations aren't effective in limiting the advertising of certain products and services, and put local media at a disadvantage.

The courses of action include reviewing individual advertising restrictions for media, as well as a discussion around a possible so-called "digital tax". The ministry also suggests reviewing the regulations concerning consumer protection, which restrict credit service advertisements and the advertising income for media registered in Latvia.

Taking into account that advertising is important for generating revenue to cover local content, the ministry says it's necessary to create advertising restrictions that correspond to the changing media environment and promote fair competition. This would allow Latvian content creators and distributors to compete in a global market.

Both European Union and OECD countries are discussing the possible implementation of a unified digital service tax for international tech companies, which make a profit in markets where they don't pay taxes. The ministry and Latvian media companies support such an initiative and reviewed the possibility of implementing such a tax.

The ministry also proposes to ensure the sustainability and stability of public media by increasing funding to the EU average, or 0.17% of GDP.

“It's especially important to set an appropriate and predictable public media financing model, as currently public media can't systematically ensure development and invest in technological modernization,” says the Ministry of Culture.

In addition, the ministry supports combining all public media into one medium, as well as gradually removing public media from the advertising market. Latvian Television and Latvian radio could completely exit the advertising market by 2021, but to do that the government would need to find 13 844 411 in financing.

The ministry considers that increasing the Media Support Fund by 30% a year would help commercial media create meaningful content, strengthening the constitutional values of national awareness, Latvian cultural space, critical thinking, and increase media responsibility and quality. In the near future the ministry plans on creating a Media Policy Council to ensure professionalism and that the MP's goals are met.

As previously reported, fears about the future of the Latvian Independent Television (Latvijas Neatkarīgā Televīzija) news division came to fruition November 7 when All Media Baltics Communications Manager Alise Mališko announced that all of their products will be rebranded and unified under the TV3 brand.

In Kariņš opinion, this shined light on weaknesses in Latvian media policy, and he gave the Minister for Culture until the end of November to submit proposals to improve current policies and ensuring diversity in independent media.

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