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Mthuli Ncube Claims UK Is Following In His Footsteps As They Propose Their Own Version Of 2% Tax

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Londone Eye, United Kingdom, Europe, England, Britain

The UK announced their planned budget for 2020 and surprise surprise it seems they are also looking at adding a new 2% tax as well. However, their version is less ruthless than ours.

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The digital services tax might be implemented in 2020 in order to target established tech giants. Previously Amazon and Facebook have been criticised for paying notoriously low taxes and it seems the UK is about to put an end to that. The 2% tax will apply to social media, marketplaces and search engines. Huge companies such as Google, Amazon, and Facebook will be taxed on 2% of their revenues instead of their profits.

Last year Facebook paid only £15.8 million in tax because they made profits of £62 million in the UK. Revenues, however, stood at around £1.27bn. You can see why the government would want to grow their tax base and get into this uncharted territory. If the tax is implemented, the UK expects to generate around $355 million in 2019-20, which is no laughing matter.

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The tax which at some point was opposed because there fears it would threaten startups will not target startups. Chancellor Hammond proposition is for the tax not to target loss-making companies and ensuring that companies with smaller profits will also pay the tax at a reduced rate.

Will this even get passed?

Though it seems, a great way to increase the government’s revenue the tax may not be passed at all. The United States government is not too chuffed about the tax as it will mostly affect firms that belong to their country. Because that’s the case there have been rumblings of a retaliation from the US government and a souring of the trade relationship between the UK and the US.

The UK isn’t in a particularly strong position when it comes to trade partners –after the stunt that was Brexit- and due to that their bargaining power when it comes to these types of situations is not really great right now

… In comes Mthuli Ncube

Mthuli Ncube, the Finance Minister sent out a tweet acknowledging UK’s move:

What can I say? The guy is an opportunist and he saw a chance to convince the public that “even the UK is doing it!” That’s not really the case here as the implementation is drastically different but it’s an easy win for the Minister who knows that most people won’t even read the story to actually understand what is really going on.

Mthuli Ncube

Professor Mthuli Ncube is the Minister of Finance and Economic Development.He was the Chief Economist and Vice President of the African Development Bank ,financial, economics, investment, and public policy expert, entrepreneur and academic. Professor Ncube divides his time between the private sector in Switzerland and... Read More About Mthuli Ncube

3 thoughts on “Mthuli Ncube Claims UK Is Following In His Footsteps As They Propose Their Own Version Of 2% Tax

  1. The big difference, Mr Ncube is that the UK stated that they were going to consult first and that the tax will go into effect in 2020, not immediately. Also please don’t forget that Britons, in general, are not living at starvation levels!!

  2. I think milking the internet has been on the EU table in different facets for years now. The uk just expedited the process independently.

  3. Since most Zimbo internet users don’t spend a day without visiting twitter, google, amazon sites, how is our own gvt. charging these tech giants tax on their revenue or profits? Can TechZim please find out inform us?

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