Digital Tax Coalition Open Letter to the G20

June 27, 2019

Dear G20 Finance Minister,

On behalf of billions of taxpayers and consumers around the globe, we, the undersigned, urge you to oppose international efforts to weaponize global conversations about digital commerce to tax tech companies. Imposing higher taxes on tech companies would lead to higher prices on consumers and force millions of small businesses to scale back their online advertising activities. Consumers, businesses, and governments would be better served by a light-touch tax and regulatory regime that encourages growth and innovation.

In the aftermath of the June 9th meeting of G20 finance ministers in Fukuoka, Japan, households and businesses across the globe have expressed concern that the proposed “closing of loopholes” in digital taxation will entail higher prices on digital products such as search engines and social media platforms. A December 2018 PwC report found that, by most estimates, a significant share of any new digital tax is likely to be passed onto consumers in the form of higher prices. This does not bode well for the billions of global citizens forging important business connections on Facebook or furthering their educations via Google and countless online academies.

Government meddling in the digital domain would only increase barriers to entry for startups looking to compete with more established tech companies. Virtually every digital service tax proposal envisions a tax based on revenues, regardless of the level of cost that companies incur. Young companies with a sudden influx of consumers and investors may still have growing pains ahead of it, such as network buildout costs and regulatory compliance issues. Taxing these start-ups will make it harder to overcome these challenges and compete for consumers’ attention and dollars.

Countries such as the United Kingdom and Spain will soon implement digital service taxes, and assure their worried citizenries that only the largest, most financially successful companies will foot the bill. Yet in the tech sector, companies can “go viral” very quickly, and the prospect of hitting a “tax wall” can deter investors from making the necessary moves to support the next social media or search engine giant. If digital service taxation becomes a global phenomenon, the tech sector’s upstart culture of innovation will give way to a placid environment dominated by just a few companies. To keep the digital domain vibrant and responsive to the needs of billions of global consumers, we strongly urge you to oppose any international regime of digital service taxation.

Sincerely,

Tim Andrews Executive Director IGO Watch

Dr. Raza Ullah Hon. President Alternate Solutions Institute (Pakistan)
Grover Norquist President Americans for Tax Reform (USA)

Dr. Barbara Kolm Director Austrian Economics Centre (Austria)
Brian Marlow Executive Director Australian Taxpayers’ Alliance (Australia)

Graham Young Executive Director Australian Institute for Progress (Australia)

Bjorn Tarras-Wahlberg Chairman Asia-Pacific Taxpayers Union

Steve Pociask President / CEO The American Consumer Institute (USA)

Norm Singleton President Campaign For Liberty (USA)

Scott Hennig President and CEO Canadian Taxpayers Federation (Canada)

Andrew F. Quinlan President Center for Freedom and Prosperity (USA)

Jeffrey Mazzella President Center for Individual Freedom (USA)

Rocio Guijarro Saucedo Gerente General Cedice Libertad (Venezuela)

Tomasz Kołodziejczuk Centrum Kapitalizmu (Poland)

Andrés Barrientos Executive Director Ciudadano Austral Foundation (Chile)

Tom Schatz President Citizens Against Government Waste (USA)

Iain Murray, Vice President for Strategy and Senior Fellow, Competitive Enterprise Institute (USA)

Yaël Ossowski Deputy Director Consumer Choice Center (International)

Katie McAuliffe Executive Director Digital Liberty (USA)

Gary Kavanagh Executive Director Edmund Burke Institute (Ireland)

Jason Pye Vice President of Legislative Affairs FreedomWorks (USA)

Federico N. Fernández President Fundación Internacional Bases (Argentina)

Roxani Kargakou Managing Partner Greek Liberties Monitor (Greece)

Jon Coupal President Howard Jarvis Taxpayers Association (USA)

Federico Rabino Director Ejecutivo Instituto Fernando de la Mora (Paraguay)

Tom Giovanetti President Institute for Policy Innovation (USA)

Masaru Uchiyama President Japanese for Tax Reform (Japan)

Mattie Duppler Senior Fellow for Fiscal Policy National Taxpayers Union (USA)

Carl Szabo Vice-President & General Counsel Netchoice (USA)

Gia Jandieri Vice-President New Economic School (Georgia)

Jordan Williams Executive Director New Zealand Taxpayers Union (New Zealand)

Lorenzo Montanari Executive Director Property Rights Alliance (USA)

Anders Ydstedt Chairman Svensk Tidskriff (Sweden)

Michael Jäger Generalsekretär Taxpayers Association of Europe (Europe)

David Williams President Taxpayers Protection Alliance (USA)

John O’Connell Chief Executive The Taxpayers’ Alliance (United Kingdom)

Maryan Zablotskyy Director Ukrainian Economic Freedoms Foundation (Ukraine)

Nisa Bahçeli President Vergi Araştırmaları Topluluğu (Turkey)

James L. Martin Founder/Chairman 60 Plus Association (USA)

Saulius “Saul” Anuzis President 60 Plus Association (USA)