Boris Johnson Calls For Digital Tax On Tech Giants

Tom Jowitt,
boris johnson mayor of London © landmarkmedia Shutterstock

Candidate to be prime minister says current tax arrangements for tech giants is ‘deeply unfair’ to the high street

Boris Johnson, the leading candidate to replace Theresa May as the next Prime Minister of the UK, has waded into the debate surrounding taxes on global tech giants.

Johnson was quoted by Reuters as saying on Thursday that the government had to find a way to tax technology giants on their income.

G20 finance ministers have already placed large tech firms on notice over their tax arrangements going forward, with changes promised by 2020.

tax

Deeply unfair

But Johnson says that at the moment, the current tax arrangements are deeply unfair on the high street.

“I think it’s deeply unfair that high street businesses are paying tax through the nose… whereas the internet giants, the FANGs – Facebook, Amazon, Netflix and Google – are paying virtually nothing,” Johnson reportedly said at a leadership hustings event in York, northern England.

“We’ve got to find a way of taxing the internet giants on their income, because at the moment it is simply unfair,” he added.

Companies such as Amazon, Facebook, Google and others have long been criticised for their tax practices that sees them reducing their tax bills by booking profits in low-tax countries (such as Ireland) regardless of the location of the end customer.

Tax changes

This dissatisfaction with the current tax arrangements for tech firms has led some countries to go it alone, with a number, including the UK, proposing national digital taxes.

France already implemented its own digital tax scheme at the start of the year.

Spain, Italy and Germany meanwhile are also said to considering introducing its own ‘digital tax’ on tech giants.

But there has been some some stiff opposition from US authorities to some countries implementing their own digital tax schemes.

In March this year the United States hit out at the ‘digital tax’ imposed on companies by the French government. A senior US treasury official called the move ‘ill conceived’, and highly discriminatory against American businesses.

The European Union is also seeking to reach an agreement to implement a European digital services tax.

For their part, tech companies have previously defended their tax structures, and insist they abide by tax laws as they’re currently written.

Do you know all about IT and the law? Take our quiz.