Finance Bill — House of Commons, 2020-07-01
Topic: Macroeconomics
Miriam Joy Cates (Conservative, Centre-right): I just want to get that image of "The Simpsons" out of my head As a new MP, I was very grateful for the opportunity to sit on the Finance Public Bill Committee. It was a fascinating experience, during which I learned a great deal, including how the progress of a Public Bill Committee can be compared so poetically to the stages of "The Pilgrim’s Progress" I would like to speak briefly about the amendments tabled to part 2 of the Bill, namely new clauses 5 and 33, and amendments 18 and 19, all of which pertain to the new digital services tax. I very much welcome the introduction of the new tax on some of the world’s largest digital service companies. Economies evolve, and it is right that from time to time we act to address imbalances and unfairnesses that arise as a result of that evolution. Over the last few years, and particularly the last few months, we have become more and more reliant on social media companies and online marketplaces. Many of us now use these services every day of our lives, sometimes against our own better judgment. I have no interest in condemning the success of these companies. The reason why they have been so successful is that they have harnessed technology to provide something that consumers want. Surely that is the aim of every business in a free market economy where there is healthy competition However, multinational companies have grown rapidly in recent years and tax systems around the world have not caught up. As has been said, many digital service companies now enjoy unfair advantages when it comes to competing with traditional, offline businesses. They usually face lower property costs and business rates, and their multinational nature means that they can move profits around the world to reduce the burden of taxation. That is unjust. This new tax seeks to address this unfairness The introduction of the digital services tax is especially timely as we emerge from the coronavirus pandemic, during which offline businesses have been even more disadvantaged and many consumers have made the switch—perhaps permanently—to online shopping. I note that the digital services tax generally has cross-party support, as it did in Committee, with Members on both sides of the House welcoming this new measure to address unfairness in our tax system and generate revenues for the Exchequer, which will, of course, be used to strengthen our public services. The amendments therefore do not aim to alter the tax in itself and how it is applied or collected. Rather, they seek to force through a reporting regime that I believe could be counterproductive or futile New clause 5 would require the Government to make an assessment of tax revenues following the introduction of the DST and lay it before the House within six months of Royal Assent. Similarly, amendments 18 and 19 seek to press the Government to report on the DST within 12 months and annually thereafter. The amendments do not take into account the fact that there will be little data of any value to report within that short timeframe. Clause 51 states: "Digital services tax in respect of an accounting period is due and payable on the day following the end of 9 months from the end of the accounting period." This means that many companies that become liable for DST following the passage of the Bill may have a significant proportion of their financial year remaining, and then another nine months following that, before DST contributions become payable.