UK Prime Minister Boris Johnson Irks Donald Trump With Digital Sales Tax

UK News

UK Prime Minister Boris Johnson has risked escalating the European trade war with Donald Trump on December 3 by promising to come up with digital sales tax.

Written By Sounak Mitra | Mumbai | Updated On:

British Prime Minister Boris Johnson has risked escalating European trade war with Donald Trump on December 3 by promising to go ahead with the British digital sales tax just hours after the US administration threatened to punish France for imposing a similar measure. Johnson said regarding the digital services tax that he thinks the government needs to look at the operation of the big digital companies. He also added that they have huge revenues in the country.

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Johnson promised to incorporate digital service tax

Johnson said that they need to sort it out to make a fairer contribution. The Conservative Party has promised to incorporate a digital service tax on the revenue of companies such as Google, Facebook, and Amazon if it wins the national elections.
Under the new plan, the tech companies that bring about 500 million pounds ($640 million) per year in global revenue will pay a tax of 2% on their gains from the UK users starting April 2020. The digital service tax of France which has been set at a rate of 3% of revenue derived from French users has raised tensions between France and the US.

The US said on Monday that it could impose sanctions of up to 100% on $2.4 billion in imports of Champagne, handbags, cheese, and other products.

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Trump lashes out Macron

Trump said that they will impose a tax on wine and other products sitting along with the French President Emmanuel Macron in London on the sidelines of the NATO summit on Tuesday.

Trump lashed Macron on Twitter saying, "France just put a digital tax on our great American technology companies. If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on Macron’s foolishness shortly. I’ve always said American wine is better than French wine!"

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