Published 04:53 IST, August 24th 2020
UK govt debunks reports about squashing proposed digital tax amid post-Brexit concerns
UK government has debunked a recent report published in the Daily Mail on Sunday which claimed Rishi Sunak was planning to scrap the proposed digital tax
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United Kingdom government has debunked a recent report published in the Daily Mail on Sunday which claimed Exchequer Chancellor Rishi Sunak was planning to scrap the proposed digital tax on tech companies like Facebook, Amazon, and Google. The Mail article claimed that the proposed tax which has been dubbed the ‘Facebook tax’ was likely to be scrapped because it threatened a post-Brexit trade deal with the US.
Digital Tax to remain
As per a statement by the UK Treasury, the proposed tax on large scale tech companies is a temporary one that will be rolled back once the international community reaches a consensus on how it wishes to deal with tech companies that pay very little tax in the United Kingdom and the countries they operate in.
As per a Guardian report, Rishi Sunak along with the finance ministers of France, Italy and Spain in a joint letter stated that companies like Facebook have benefitted greatly from the coronavirus pandemic and have in-turn become much more powerful and more profitable and therefore the companies need to be made to pay their fair share of taxes.
Robert Lighthizer, a US trade representative, is reported to have told the American Congress that the United States has abandoned all attempts to find solutions on how to tax multinational tech companies.
As per reports, the 2018 UK budget first mentioned a 2 percent tax on search engines, social media services and online marketplaces in an attempt to ensure that the revenue generated from these online services remained in the country. Large tech companies often pay relatively low tax, including the UK because they base their operations in low-tax economies such as Ireland.
04:53 IST, August 24th 2020