France Looks to Tax Companies Collecting User Data

By: Umair Yousuf  |   January 22nd, 2013   |   Business

With the world economy still reeling from the global economic crisis, governments are looking at new ways to generate more funds with France having come up with a novel proposal to “tax the internet”.

 

According to a report in the New York Times, the French are looking at ways to tax American companies that dominate its digital economy but pay next to nothing to the government as they remain beyond the country’s fiscal authorities.

 

In a report commissioned by the French President, Francois Hollande, it was recommended that tax authorities charge a tax on companies that collect personal data of users on the internet. Such personal information is of vital importance to technology firms such as Google, Amazon and more as it allows them to better tailor their services for the customers.

 

The French are now seeing this information as a commodity which can be taxed so that internet giants who make billions in revenue from the exploitation of this information can be made to pay more to the government.

 

Another reason for the tax is that French authorities are not at all pleased with the current status quo where they receive little to no tax revenues from American internet giants while their own local firms continue to struggle.

 

Speaking to reporters in Paris, digital economy minister, Fleur Pellerin said:

 

“We want to work to ensure that Europe is not a tax haven for a certain number of Internet giants.”

 

The French will still have to convince the rest of the European Union before moving forward with the new taxation plans but it shows increased government commitment to increase the tax net.

 

Source: New York Times