Britain intends to updates its tax laws in line with unitary taxation so as to make tech giants pay their dues and plug tax loopholes.
In a significant development, Britain’s finance mister Philip Hammond stated, Britain will unilaterally implement a digital service tax if there is no wider international agreement soon on how to tax the world’s biggest internet companies.
“The best way to tax international companies is through international agreements but the time for talking is coming to an end and the stalling has to stop,” reads the text from Hammond’s speech wherein he will say to the the Conservative Party conference in the English city of Birmingham.
“If we cannot reach agreement, the UK will go it alone with a Digital Services Tax of its own”.
Previously, Britain has stated it was weighing its options on taxing the revenues of internet firms, including Google and Facebook, until such time that international tax rules are designed to cope with shifting of sales and profits of tech tech between jurisdictions.
In this regard, Hammond stated Britain is also likely to update its competition policy in response to the power of major companies.
“The expansion of the global tech giants and digital platforms, while of course bringing huge benefits to consumers, raises new questions about whether too much power is being concentrated in too few global technology businesses,” said Hammond.
Incidentally, Hammond has appointed Jason Furman, former U.S. President Barack Obama’s chief economist, to lead a review of Britain’s competition regime, so as to ensure that Britain fits into the digital era.
The Confederation of British Industry warned that any tax moves should not damage the UK’s global competitiveness.
“All businesses are increasingly digital. Any new approach must be built on evidence from enterprise or it risks being blunt and counterproductive,” said Carolyn Fairbairn, CBI’s Director-General, in a statement.