Europe must lead the way with digital tax, says EU competition commissioner
Europe must agree on plans for a new digital tax and should be the trailblazer if there is no global consensus, the EU’s competition commissioner Margrethe Vestager has said.
The EU last month scrapped initial plans to roll out a digital tax on tech giants after opposition from several member states.
Read more: EU drops digital tax plan to focus on global reform
France has been a vocal proponent of the new levy, but at a meeting of EU finance ministers over the weekend, Sweden, Finland, Ireland and Denmark all blocked a draft EU-wide tax proposal, Reuters reported.
But Vestager insisted the bloc will not abandon its plans for a new levy. “We are becoming an increasingly digital world and it will be a huge problem if we do not find a way to raise [digital] taxes,” she told French media.
“The best thing is a global solution. But if we want to obtain results in a reasonable period of time, Europe must take the lead,” the commissioner added.
France will today begin debating a so-called GAFA tax, named after Google, Apple, Facebook and Amazon, which proposes a three per cent levy on the revenues of major tech firms.
The Organisation for Economic Cooperation and Development (OECD) is currently looking into an overhaul of global tax laws that would prevent tech firms from dodging corporation tax by exploiting loopholes.
Vestager, a former Danish economy minister, has been a formidable force in the EU’s efforts to crack down on tax avoidance by tech firms.
During her five-year tenure she has handed down fines to Google totalling €8.25bn (£7.1bn) and ordered Apple to pay back €13bn to Ireland.
Vestager will end her reign as competition commissioner this year and is tipped as a possible replacement to Jean-Claude Juncker as the next European Commission president.
Asked if she was interested in the role, Vestager said: “I take a lot of interest in the future of Europe. My point is that before we decide on any kind of new face for the Commission, we really need to know what we want to do.”
Read more: Social media firms face fines in 'online harms' crackdown
The UK today unveiled plans for a crackdown on harmful material appearing online, which could lead to heft fines for tech firms that fail to comply.
Chancellor Philip Hammond has also put forward plans for a digital services tax, which is set to come into force next year.