The plans of the United Kingdom to press ahead with imposing digital tax despite opposition from the United States president Donald Trump has been supported by the European Union’s leading tech regulator.
She was a “strong supporter” of national digital taxes which will take forward the process of development of an international agreement on such taxes, said Margrethe Vestager, in charge of Europe’s digital policy. She is also the competition commissioner of the EU. If there is no results in the international efforts to find a solution on digital tax, the EU’s plans for a digital tax will be revived within a year, she said.
“I think it is very important that we keep up the momentum. Because of this very fundamental injustice that most people and businesses pay their taxes and they are competing with businesses who create value but do not pay taxes,” she said in an interview with the Guardian and other European newspapers.
Vestager said that she supported all of the EU member states that have imposed or plan to impose digital taxes because it was a “very, very simple thing that most businesses pay their taxes”. She however did not name the UK in this statement.
The insistence of the British government on the imposition of the digital tax has angered Trump who claims that the taxes are aimed at American tech companies such as Facebook, Google and Amazon. The issue has come up at Davos this week with the UK chancellor, Sajid Javid stressing on pushing ahead with the tax while members of the Trump administration threatening to impose additional tariffs on cars made in the UK.
France, which had already imposed a 3 per cent digital tax last year, agreed to hold back the taxes for a year while awaiting a resolution emerging from the ongoing talks on the issue at the Organisation for Economic Cooperation and Development (OECD). Following the imposition of the digital tax, Trump had also threatened to impose punitive tariffs on French wines, champagne, Roquefort cheese and handbags.
While stressing that France had not succumbed under pressure from the US, French economy minister Bruno Le Maire said that digital companies in France will have to “pay their tax dues” in the form of either the tax solution that the OECD comes up with or the French tax.
The chances of the OECD summing up with a framework that would apply to more than 130 countries drafted by July are good, said the head of the OECD, Ángel Gurría, on Thursday.
The European Commission will support member states implementing digital taxes, said Vestager while speaking before Gurría’s latest intervention. She said that Trump “decides what he will do and we decide what we will do”.
However one should not be giving up on the possibility that the OECD will be reach an agreement just now because that would be “questionable and wrong”, she added.
“It says at the end of this year or beginning of next year. That’s the task we’ve been given,” she said when asked about the time frame of the commission to act in the absence of a deal by the OECD.
(Adapted form TheGuardian.com)