Digital services tax: introduction

Part of Finance Bill – in a Public Bill Committee at 12:15 pm on 11th June 2020.

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Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury 12:15 pm, 11th June 2020

I thank my hon. Friend for that comment. In a way, he leads me on to my next remarks in response to the hon. Member for Streatham. He is right. The dynamic market that we are seeking to tax is one where revenues are not absolutely predictable; they may be higher or lower than estimated. The tax therefore stands in contrast to a well-established tax such as VAT, because we can be much more certain about how much that tax will raise.

It is also important to understand that this is not a tax designed to penalise certain companies. The strength of our online sector in the UK has been a very important part of the response to coronavirus, as I have mentioned. There is no attempt to pick out companies and target them with the tax. There is a concern about failings in the international tax rules, and that is what the Government seek to address.

The hon. Member for Houghton and Sunderland South raised the issue of multilateral action and asked whether adequate leadership had been exercised. It has been recognised that the OECD has made some good progress in this area recently, which has been achieved with a lot of urging and support from this country. Ultimately, we all agree that international and corporate tax needs to be addressed in a global and inclusive way. That would be the Government’s strong preference, but we have not waited—I do not think the hon. Lady would want us to wait—because we think it is important to take a lead.