Nick Clegg admits Facebook underpays tax in UK digital levy row

Nick Clegg admits Facebook does NOT pay its ‘fair share’ of taxes but demands Sajid Javid DROP plans for a new digital levy on US giants, saying ‘no-one wants to see trade wars’ amid stand-off with Donald Trump

  • Ex-deputy PM, now a lobbyist for the tech giant, attacked Sajid Javid’s plans
  • He admitted that Facebook was underpaying taxes around the world
  • But he attacked idea of 2% digital tax saying it was ‘not a sustainable solution’

Facebook is not paying enough tax around the world but UK plans for a tough new levy are not a ‘sustainable solution’, former deputy prime minister Sir Nick Clegg warned today.

The ex-Liberal Democrat leader, now a lobbyist for the tech giant, attacked plans by Chancellor Sajid Javid to bring in the toll in April, which has sparked a furious row with the United States.

Donald Trump’s administration has threatened a trade war over the plans to take US companies in Britain, including imposing tariffs on UK-made cars.

Speaking to the BBC this morning Sir Nick admitted that Facebook did not pay its ‘fair share’ taxes around the world, but insisted that a global perspective was the answer rather than local action.

He  did not rule out the proposals being used as a bargaining chip in transatlantic post-Brexit trade negotiations and urged the UK to pause the plans to work towards an international solution.

He told Radio 4’s Today programme: ‘No-one wants to see trade wars but equally no-one wants to see what is, in the end, not a sustainable solution, which is a lot of patchwork taxes set at different levels in different ways, which don’t raise, in the grand scheme of things, that much money either. 

The ex-Liberal Democrat leader, now a lobbyist for the tech giant, attacked plans by Chancellor Sajid Javid to bring in the toll in April, which has sparked a furious row with the US

Speaking to the BBC this morning Sir Nick admitted that Facebook did not pay its ‘fair share’ taxes around the world, but insisted that a global perspective was the answer

The Chancellor said the digital services tax will be introduced from April but will only be a temporary measure

‘I totally understand the political significance which is attached to this because people want to see big global companies like Facebook pay their fair share, but actually the solution the Treasury has come up with compared to total tax intake for the Treasury is very, very small indeed.

‘I would simply throw the question back and say to Sajid Javid ”Look, you’re not giving anything up by just saying you want to give the international talks more time to succeed”.’ 

On Wednesday US Treasury Secretary Steven Mnuchin said Donald Trump will personally heap pressure on Boris Johnson to drop the proposed levy as MrJavid insisted it will go ahead.

The Chancellor said the digital services tax will be introduced from April but will only be a temporary measure until an international agreement is in place on how to deal with big online companies like Google and Facebook.

But Mr Mnuchin was clear the White House remains ardently against the move as he hinted retaliatory tariffs could be imposed on the UK’s car industry if the tax is rolled out.

The US and France have announced a truce over President Emmanuel Macron’s plans to introduce a similar measure after Washington responded with a threat to slap punitive tariffs on products including French cheese and wine.

Mr Javid said the tax – a two per cent levy on the revenues of search engines, social media platforms and online marketplaces which derive value from UK users – will be introduced.

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