Work on digital tax as Trump blasts France

As a digital tax plan gets underway, the government will need to tread carefully after France faces the wrath of Donald Trump.

The Morrison government’s digital tax plan is in the works, but a similar move by the French upset US President Donald Trump.

Ensuring global tech companies pay their fair share of tax outside their home base of the United States was not covered in Australia’s major inquiry of digital platforms by its competition watchdog.

But releasing the Australian Competition and Consumer Commission’s 600 page report and 23 recommendations on Friday, Treasurer Josh Frydenberg said it is an issue the government remains “very much focused on”.

Instead, the Morrison government is working on a digital tax through the G20 and the Organisation for Economic co-operation and Development.

It would appear it is an area Australia and others will need to tread carefully after France faced the wrath of US President Donald Trump having gone it alone with a tax aimed at US technology companies.

An angry president says France can expect a “substantial reciprocal action”. “If anybody taxes them, it should be their home Country, the USA,” Mr Trump tweeted in response to French President Emmanuel Macron’s “foolishness”. “I’ve always said American wine is better than French wine!”

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!

— Donald J. Trump (@realDonaldTrump) July 26, 2019

Tax aside, the ACCC has unravelled the growing complexity of the digital world and the power the likes of Google and Facebook enjoy in its report that took 18 months to complete.

The government will be seeking feedback to the commission’s recommendations over the next three months that aim to make tech giants more accountable and transparent.

Asked whether Labor supported a special tax on tech companies, opposition communications spokeswoman Michelle Rowland on Sunday said the issue was “complex”.

“I don’t think you’d find an Australian who would be against everyone paying their fair share.

“I think that it is an open question about whether they are paying their fair share, I don’t have any evidence in front of me,” she told Sky News this morning.

“I think it’s right to expect that their contribution is commensurate with the value they get from Australian consumers.”

Her frontbench colleague Matt Keogh said it is important to improve digital literacy so people understand what they see at the top platform feed they use may not be accurate information.

“It is also important to recognise the way in which entities like Facebook and Google put their own manipulation over the top of that,” he told ABC television on Saturday.

AAP