Amazon has expressed strong support for Canada’s move to cancel its planned digital services tax, a decision that came just days before US tech companies were expected to make significant payments.
The tax, introduced last year, targeted major US technology firms including Amazon and was projected to generate 5.9 billion Canadian dollars or about 4.2 billion US dollars over five years. The deadline for payment was set for this Monday.
Following pressure from the United States and stalled trade negotiations, Canada reversed its stance and officially dropped the tax on Sunday. The move has been seen as a step to revive discussions and improve trade relations between the two countries.
In response, an Amazon spokesperson said, “Amazon applauds Canada’s decision to rescind the Canada Digital Services Tax Act.” Amazon added, “Digital services taxes are discriminatory, stifle innovation, and harm consumers, and we appreciate the US government’s work to address DSTs around the world.”
The tax was originally designed to ensure that large digital companies paid taxes in countries where they operate and generate revenue, countering common tax avoidance strategies used in the tech industry.
Several other nations including Austria, Brazil, Britain, France, India, Italy, Spain and Turkey have already implemented or proposed similar digital taxes, aiming to make tech giants contribute more fairly to local economies.
Canada’s decision to abandon the tax marks a significant development in global digital tax policies and has been welcomed by major players in the tech sector, particularly in the United States.
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