Digital Services Tax will make life more expensive

OTTAWA, ON: The Canadian Taxpayers Federation is calling on the federal government to drop its Digital Services Tax following the Parliamentary Budget Officer’s report showing it will cost $7.2 billion. 

“The feds need to stop dreaming up new taxes and new ways to make life more expensive,” said Franco Terrazzano, CTF Federal Director. “Prime Minister Justin Trudeau should be doing everything he can to make life more affordable, but this Digital Services Tax will mean higher prices for ordinary Canadians.”

The PBO estimates a Digital Services Tax will cost taxpayers $7.2 billion over five years. 

The DST targets large companies operating online marketplaces, social media platforms and earning revenue from online advertising, such as Amazon, Google, Facebook, Uber and Airbnb. However, consumers should expect to pay higher prices because of the tax.  

“It is also expected that businesses in the targeted sectors will adjust their services and prices in response to the new law,” the PBO said. 

When faced with the three per cent DST in France, Amazon simply increased its commission charge to French vendors by the same amount. 

“An economic impact assessment of the French digital services tax shows that about 55 per cent of the total tax burden will be passed on to consumers, 40 per cent to online vendors and only 5 per cent borne by the digital companies targeted by the new tax,” according to the Tax Foundation. 

“Trudeau’s deficit spending would blow through this cash in less than two weeks,” Terrazzano said. “The feds should back down from the Digital Services Tax and instead cut wasteful spending and taxes.”