Stop the press: Not another tax named after a multinational
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Stop the press: Not another tax named after a multinational

Editor Joe Stanley-Smith introduces the February 2019 issue of International Tax Review

In an interview with a national newspaper, Rebecca Long-Bailey, a key member of the UK opposition party, Labour, suggested that her party could introduce an 'Amazon tax' if elected.

But wait, didn't the UK already introduce an Amazon tax in the October 2018 budget? Yes, it did. This was the name given to what you and I would call the digital services tax.

This brings me to one of my pet hates as a tax journalist: naming taxes after the multinationals they're ostensibly targeting. The phrase 'Google tax' stirs within me feelings of inexplicable rage.

Various countries including Italy have mooted taxes on advertising known as 'Google taxes'. In the UK, the Google tax is the diverted profits tax, which doesn't actually apply to Google.

In Russia, the term is widely used to mean the destination principle for VAT purposes applied on online e-services sales. France's digital service tax (on the same principles as the UK 'Amazon tax') is often referred to as the 'GAFA tax', an acronym for Google, Apple, Facebook and Amazon.

After exploding in a whirlwind of expletives when reading the headline, I settled in to read the newspaper article itself. Long-Bailey was actually rather measured in her interview: "It's not a case of black and white, 'right, well, let's tax online and give tax reliefs to high street retailers', because I don't think that's fair either," she said.

At no point did she reference an 'Amazon tax'. Nor, as far as I've been able to tell, did UK Chancellor Philip Hammond in his budget speech.

It seems I'd been taken in by one of the past decade's numerous unedifying journalistic trends: Clickbait.

All this time I've been angry with politicians for oversimplifying tax matters, and with tax policymakers for overcomplicating them, but should journalists take the blame? Are we the baddies?

Well, not ITR of course. Our reporters understand complex tax matters and have time to analyse issues. But time is not a luxury afforded to most of our contemporaries at mainstream publications. It's why I applaud the work of tax professionals, from Richard Murphy through to Grover Norquist and everyone in between, who make an effort to speak to the public about tax matters.

With the rise of fake news, alternative facts, clickbait and the five-second attention span, communicating complicated concepts like the taxation of the digital economy is important if we're to have rational debate on the subject.

Joe Stanley-Smith

Editor, International Tax Review
joseph.stanley-smith@euromoneyplc.com

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