Paolo Gentiloni the former Italian Prime Minister and from November 1, European Commissioner for Economy, has said that the European Union will introduce a tax on digital services even if the rest of the world can’t agree on such an accord. Countries, including France, have already been looking at national taxes but by having a tax across the entire 28-country bloc, it’ll be much harder for multinational tech firms to wriggle out of paying their fair share.
Gentiloni has indicated the digital tax would be a priority for him and that he would oversee the efforts to bring the bloc to an agreement. Previous attempts at an EU-wide have failed after a handful of countries decided that the suggested plans don’t work for them; some countries, such as Ireland, like to attract big tech firms with lower taxation than their neighbours which helps create jobs.
Commenting on the issue, Gentiloni said:
“My first task will be to see whether it is possible to introduce a web tax at the OECD/G20 level, that is to say at a global level, because that would be the most effective solution. The Commission will seek to reach an accord by 2020 but if that’s not possible my mission will be to propose a European web tax ... we’re not prepared to wait.”
Big tech firms have been raking in piles of money in the last decade thanks to the availability of smartphones and the potential they unlock with apps and the like. This success has also come around thanks to low paid employees in countries such as China, and from those working in the gig economy which provides very little in the way of pay or workers’ rights. By taxing these tech giants, some of the money will be able to make its way round to the rest of society.
In a frankly shocking interview this year, Eric Schmidt, the former head of Google, admitted to the BBC that he was “comfortable” with the amount of tax Google has paid over the years and that if countries want more money they should tax companies more appropriately.