Italy Considers Porn Tax

Kat Khan
ROME — Italy's cash-strapped government has decided to raise taxes on one of the country's few vibrant industries, pornography, to help harness the burgeoning budget deficit.

The tax, which imposes an additional levy of 25 percent on all income from pornography, is contained in a package of amendments to the 2006 budget presented in the Chamber of Deputies.

Under the amendment, subscribers to hardcore television channels must also pay an additional tax of 10 percent. The tax is estimated to accrue $357.5 million during 2006 for the Italian government.

This week, Economy Minister Giulio Tremonti said the porn tax would not conflict with EU tax regulations.

"As the tax was defined before, basically it was a duplication of VAT generating compatibility problems on a European level,” he said. “We already have a pending legal issue and the ‘porn tax’ would have been subject to critics.”

Tremonti said that for this reason, "we reformulated the definition according to the French model, changing it from a tax on the transfer of products into a tax on the income of producers." The tax is not limited only to income connected to pornographic material but extends to products oriented towards extreme forms of violence as well.

The proposed tax previously as approved at committee level before it went to the Chamber of Deputies, Italy’s lower parliamentary house, this week for review.

The tax proposal follows a study released in May showing that Italians spent $1.4 billion on adult content last year, up 27 percent from 1991. The study also showed that nearly 8.8 million Italians, about 15 percent of the population, are consumers of adult entertainment. The study estimates that Italy’s main cellphone providers sold at least 70 million five-minute adult videos at $2.50 each to their subscribers during 2004.

Recently, in the U.S., Kansas lawmakers have started pushing for a 10 percent tax on all adult content sold in the state. Additionally, in July, Senator Blanche Lincoln, D-Ark., introduced the Internet Safety and Child Protection Act, legislation that would impose a 25 percent excise tax on all national adult transactions and require online adult websites to use software for age verification of users attempting to access adult websites. The bill is currently under review.