It seems Tech giants will be required to pay more, not just take, in the UK at least.
The British Government said on Monday it will introduce a digital tax for high-earning tech companies operating in the UK.
The tax which won’t fly until April 2020, is one among a host of economic policies unveiled by Chancellor of the Exchequer Philip Hammond as part of the Country’s Annual Budget.
Profitable digital companies with a global revenue of more than $640 million per year will be required to pay 2% on revenues generated within the UK, an amount that reflects the value of UK users.
Presently, the current system taxes foreign companies only on their UK profits, a much smaller number in most cases.
The government said the new tax had been designed to avoid penalizing smaller tech companies and startups or stifle innovation.
Not everybody agrees with this assessment of the policy. TechUK, Industry Group, has put out a statement expressing their feelings.
‘This approach risks undermining the UK’s reputation as the best place to start a tech business or to invest.’ Said TechUK CEO Julian David. ‘The 500 million threshold the Chancellor proposed is low and risks capturing much smaller companies than anticipated