UK may impose digital tax on tech giants without international agreement
The UK could implement a digital service tax on the world's biggest tech companies, even if other countries fail to cooperate. Speaking at the Conservative party conference this week, the Chancellor of the Exchequer Philip Hammond warned that the "time for talking is coming to an end and the stalling has to stop."
The UK will "go it alone"
Britain could potentially tax the revenues of internet firms such as Facebook, Google, Apple, and Amazon - without an international agreement. Hammond said “if we cannot reach agreement, the UK will go it alone with a Digital Services Tax of its own." Hammond clarified that the tax would only apply to companies above a "quite substantial" size. The assessment will also place a value on the content and data of British consumers as a share of the company's overall worth in the country. “I have to say my prognosis is that it is quite unlikely that we will be able to achieve international agreement in anything like a sensible time scale," he added. Hammond explained that this is "because the US isn't frankly onside with this agenda."
A digital tax could damage startups, entrepreneurs warn
The future of Britain's tech sector is uncertain as Brexit negotiations proceed to unfold. UK entrepreneurs have warned that a digital tax could damage innovation and investment in startups. Dom Hallas from The Coalition for a Digital Economy insists that the tax would damage "growing British tech businesses," not tech giants. He said that "the true cost will be in hurting innovative British companies who want to develop at home then grow globally." In addition, industry group techUK has warned that tech firms could be at risk if the UK leaves the Single Market for services. A one-sided deal would be particularly detrimental to British digital firms trading in Europe.
Are tech giants untouchable?
Today's tech giants possess an incredible amount of power. At present, it seems like these companies can even capitalise on the very problems they create. As the dust of GDPR settles, tech giants could emerge as the champions of a newly regulated data economy. The unwavering influence of tech giants is growing everyday. Hammond touched on this issue during his speech. He said the expansion of the global tech giants "raises new questions about whether too much power is being concentrated in too few global technology businesses." Hammond has appointed President Barack Obama's former chief economist, Jason Furman, to investigate Britain's policies in the tech sector. Furman's role will be to determine what changes are necessary to make competition policy “fit for the digital era."