Topical Questions

Part of Oral Answers to Questions — Treasury – in the House of Commons on 9th April 2019.

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Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

As the right hon. Gentleman probably knows very well, the issue is a good deal more complex than he suggested in his question. We have announced the introduction of a digital services tax to begin to address the challenge of shaping our tax system to respond to the digital age, but the problem is that we have a set of international tax rules that we are obliged to follow, which were invented in the age when international trade was all about goods. Nowadays it is mostly about services, and much of it is about digital services. The international tax system is simply not fit for purpose and the UK is leading the charge in international forums—including the G20, which will be meeting later this week in Washington—in looking for a new way to allocate profits appropriately between jurisdictions where digital platform businesses are involved.