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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.

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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