The finance minister of Germany Olaf Scholz told CNBC that the firms of technology are paying their share in taxes. He thinks it is time to do something about the problem. He said that his concern is that these technology firms are not paying any of the taxes that they should be actually paying. A group of organizations that are labeled by the EU as GAFA that include companies like the Amazon, Google, Facebook and Apple have in the past faced criticisms from political leaders for failing to pay enough tax.
One of the major points for disagreement is the claim that the activity of the technology firms is not being taxed. In the EU, the pack was led by France, a place where it introduced 3% levy on the profits of the technology companies that make $843 million each year all over the world. This move raised concerns for the US as the country worries that this would affect the American firms. Meanwhile, UK has proposed 2% tax on digital services on the technology firms that earn minimum $653 million pounds a year in revenue globally.
Some member states of EU have been dissatisfied about the process of implementing a digital tax all over Europe. Margrethe Vestager, the EU Competition Commissioner said recently that Europe should lead on a proposal in case of insufficient global consensus. Scholz said that finding an agreement on reforms of tax to match fast-paced digital age still remains an issue globally. Scholz added that we need to find an agreement globally on the question as this will help immensely. He further added that US has been taking a common approach referring to the efforts of America to apply a tax rate that is minimum on multinational companies that are operating in jurisdictions of low tax.