Tech giants in Europe including Facebook, Google, and Amazon might start paying additional billion in tax after European lawmakers demanded that they contribute more to public funds.
France decided to follow the decision of the United Kingdom to impose a tax on the local revenues of the internet giants. France plans to initially cut 3 percent to the tech companies' revenues in the form of taxes which could generate at least €500 million. The amount of tax could still rise based on the policy ruling.
Bruno Le Maire, France's prime minister, publicized the plan on Wednesday. He said that they will tax digital companies that have global revenues that are more than €750 million and domestic revenue In France over €25 million. The finance minister said that the tax was about "justice". He added that the digital giants use to make a profit out of the French's personal data and then transfer the money somewhere else without paying their fair amount of taxes.
Le Maire said that the €500 million figure is just a starting point for the taxes. The Associated Press reported that France is expecting to immediately introduce the tax especially that it is backed by President Emmanual Macron's party that has a majority in the French Parliament.
Britain is also expected to follow the policies after France implementation. Chancellor Philip Hammond said that the United Kingdom would tax 2 percent of British user-generated revenue in a new "Digital Services tax."
The Chancellor said that it is estimated to bring in up to £400 million per year for the Treasury which is expected to start in 2020. Britain has just closed the consultation period for the proposals. The combined taxes of the United Kingdom and France will reach $1.1 billion from the United States tech firms alone. According to the United Kingdom, its Digita; Services tax will be implemented as an interim measure until the European Union creates its own policies to tax international tech giants. The Digital tax proposal of the European Union was blocked by Ireland, Sweden, Denmark, and Germany in late November.
The French Prime Minister is vocal in its proposals of pushing through European Legislation. He recently told the Le Journal de Dimanche, a French newspaper, that a European agreement was "within reach".
Le Maire expressed his optimism that other countries will follow its lead in an interview with Europe 1. He said that the tax we're making at a national level and he hopes that it will become an international tax and that all developed countries could adopt the idea.
