Impact of Digital Tax on the EU Trade - Taxation Assignment Help

Assignment Task

Impact of Digital tax on the EU trade

Part 1

Title: Impact of Digital tax on the EU trade

Research Problem

The digital economy has been growing faster than the global economy by close to 50% in the contemporary world. In this respect, the new development has sparked debate among EU member states, whom a section has opposed the Digital Services Tax (DST). However, the effort has not paid off as there are still underlying issues affecting member state citizenship powers to influence changes (Cini & Borragán, 2019). The DST intended to collect revenues from the online advertising services, online sales, and incomes from the online intermediary activities. However, the EU concept of imposing the DST has raised speculations in the political arena as the decision was based on the assumption that e-commerce took place in a lawless no man’s land. As a result, the DST system has proved disastrous to the EU’s innovation ecosystem.

Thesis Statement: DST faces a lot of issues because it was grounded on the misconception that the actors in the e-commerce space were subject to overlapping the trade rules.

Part 2: Literature Review

They have complex debates emerging around the EC digital tax proposal. Most of this new development has geared towards making new amendments to the current DST systems as some of the EU as some of the world’s economic giants there are still setbacks which most probably (Bunn, 2018). One of the most critical issues raised by the various analysts is that in the new digital age, it is quite complex to classify a business as either digital and non-digital. In that case, the imposition of the DST would lead to double taxation of these businesses. Additionally, DST would most likely extend to non-digital companies because business technology has enhanced the networking of companies. Bunn (2018) also notes that a poorly designed digital tax system is detrimental to innovative business hence infringing the potential of such business in improving the livelihood of the society. As a result, the EU council has been weighing varying criticism to develop the most favorable DST system for the digital business.

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