Canada has made public its plans to introduce digital tax on big tech companies starting from 2022. The news was announced by Finance Department of Canada which says it will impose the digital taxes until major economies come up with a coordinated approach on taxation concerning multinational tech giants.
This digital tax will come into effect starting from January 2022 under which it will increase federal revenues by C$3.4 billion ($2.6 billion) for the next five years starting from the 2021/2022 fiscal year.
“Canadians want a tax system that is fair, where everyone pays their fair share,” said Canada’s Finance Minister Chrystia Freeland.
Currently, the Organization for Economic Cooperation and Development is in the process of formulating a common framework to ensure mega tech companies like Alphabet Inc.’s. (GOOGL) Google and social networks like Twitter Inc. (TWTR) and Facebook Inc. (FB) pay their taxes during the pandemic.
Canada says delay to reach an agreement over the matter prompted it to take the approach of imposing digital taxation on the companies.
This threat has not seated well with the administration of President Trump which has in return threatened of trade retaliations if Canada imposes the taxes.