EU must lead the way with a digital tax: Vestager

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Margrethe Vestager, European commissioner for competition, addresses the closing ceremony of the Hamburg Summit in Hamburg, Germany, Nov. 27, 2018. German and European officials on Tuesday called for stronger EU-China ties to promote a rule-based global trade system at the end of the two-day Hamburg Summit. Xinhua/Shan Yuqi

PARIS (Reuters) – Europe needs to decide on a digital tax and should lead the way if there is insufficient consensus globally, the EU competition commissioner Margrethe Vestager, said yesterday.

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There is still disagreement among EU members over how to implement a so-called “GAFA tax” – named after Google, Apple, Facebook and Amazon – to ensure the global internet giants pay a fair share of taxes on their massive business operations in Europe.

France has been driving hard for such a tax, but at a meeting of EU finance meetings over the weekend, Sweden, Finland, Ireland and Denmark blocked a draft EU-wide GAFA tax proposal, officials said.

“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,” Ms Vestager told France Inter radio.

Ms Vestager, who is widely talked about as a candidate for the European Commission presidency when Jean-Claude Juncker’s term expires in November, said European countries first needed a deal which could lead to a EU-wide harmonised tax.

“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.

Lawmakers in France’s National Assembly, France’s lower house of Parliament, yesterday began debating a draft national GAFA tax law. The bill proposes a 3 percent tax on digital advertising and other revenues of tech firms with worldwide revenues of more than 750 million euros ($842 million).

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