Digital services tax ‘threatened by UK-US trade deal’
Plans for a UK digital service tax designed to raise £400 million a year by 2022 may have to be scrapped under the terms of a UK-US trade deal, campaigners have warned.
Global Justice Now said Boris Johnson’s enthusiasm to conclude a “quick” trade deal if he becomes Prime Minister next week would limit UK policymakers, who are currently working on the measure.
The proposed new tax applies a two per cent levy to companies such as search engines, social media platforms and online marketplaces with global revenues in excess of £500 million and UK revenue in excess of £25 million, FT reports.
Global Justice Now director Nick Dearden said the TTIP negotiations between the US and the EU made “very clear” what the US would want from a trade deal with Britain.
Mr Dearden said: “The US position is not weakening over time, quite the reverse. Last week, it tried to bully France into dropping proposals for a special tax on big technology corporations like Amazon and Facebook.
“A trade deal between the US and UK would make it very difficult, if not impossible, to replicate that tax here, something government ministers have said they would want to introduce.”