Warsaw, 7th November 2019
WEI and Americans for Tax Reform discuss the digital tax at a round table in the ‘Freedom Lounge’
On 6th November 2019, a round table dedicated to the subject of the digital tax and the possible consequences of this concept entering into force in Poland took place in the ‘Freedom Lounge’. The event was organised by Warsaw Enterprise Institute, a think tank of the Union of Entrepreneurs and Employers, and Americans for Tax Reform, a Washington-based organisation fighting for taxpayers’ rights for over 30 years.
The event began with a presentation by Andreas Hellmann who at ATR deals with international tax law, including tax on digital services. After introducing the organisation he represents in a nutshell, he briefly described the history of the digital tax idea.
“By means of proposals to introduce a digital tax, France, the Czech Republic and Poland are trying to bypass international rules of tax jurisdiction,” he said. “Every politician’s dream is to tax people who have no influence on him being elected.”
The ATR representative then presented the current situation regarding the popularity of the idea of digital tax and negatively assessed the concept itself, indicating that this tribute ultimately burdens consumers.
“This tribute would impose an enormous financial burden for companies providing digital services (a large part of them American), which would in turn lead to higher prices for consumers in European countries,” he emphasised. “The digital tax is a huge threat to competition and innovation as well as American and European economic growth.”
After Andreas Hellmann’s speech, Jakub Bińkowski, director of the Department of Law and Legislation of the Union of Entrepreneurs and Employers, took the floor and presented the latest document by the Union: the Business Paper under the title “Digital tax and the threats resulting from its introduction”. He stressed the fact that the development of digital tools should not lead to attempts to create sectoral tax solutions.
“If international corporations are taxed inefficiently, it is necessary to consider systemic changes instead of drafting regulations only for selected industries,” he stated. “Especially since according to available studies, representatives of ‘traditional’ business often pay relatively lower income taxes than entities from the digital industry. So why should the latter be charged with any additional tribute?”
Both presentations highlighted the fact that international organisations such as the European Union and OECD have worked or are working on developing solutions for taxing the digital economy. Independent initiatives of individual countries in this scope do not serve solving the problem on a global scale, and are troublesome from the point of view of companies due to the chaos they generate.
Tomasz Wróblewski, Warsaw Enterprise Institute President, spoke after the presentations and opened the round table expert discussion. He said that at the moment it was difficult to isolate a digital economy, because digital tools and the Internet were becoming more and more commonplace tools used to run a business.
“Designing solutions exclusively for the ‘digital economy’ is a step in the wrong direction, as it is difficult to define this industry and the OECD admits it. There can no doubt that the digital tax is simply another idea aimed at obtaining even more money from citizens in the form of taxes,” he noted. “The French example perfectly shows that the group most burdened by this tribute after its introduction are the consumers, and indirectly its costs are also borne by smaller companies using digital solutions.”
Experts invited to participate in the round table, representatives of business and ministries, then discussed the concept of a digital tax, international experiences and the potential effects of introducing this tribute in Poland.