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UK-US Lock Horns Over the Issue of Digital Tax

Even as Brexit uncertainties remain in focus, Britain looks all set to begin a trade war with the US after Finance Minister Sajid Javid confirmed that the UK will implement a digital tax on big tech companies in April 2020. The UK is considering imposing a 2% levy on revenues earned from digital services on leading tech companies, most of which are American.

According to Javid, the digital services tax is a temporary measure until a comprehensive solution is worked out at an international level. Commenting on the UK’s proposal, OECD’s Secretary General Angel Gurria stated that the UK should hold off on such a move until an international deal is fixed on this issue.

Unsurprisingly, the US has already reacted, warning the UK that such a move will force it to impose tariffs, possibly on auto exports from the UK. This would be a significant blow to the UK as auto exports to the US are worth around £8.4 billion.

Speaking at a panel at Davos on the issue, US Treasury Secretary Steven Mnuchin remarked, “We’ll be having some private conversations about that [digital tax]. I’m sure the President and Boris will be speaking on it, as the President did with [French President] Macron.”

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Arslan Butt
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Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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