U.S. Rep. Ron Estes (R-KS) expressed concern that Canada’s new digital services tax would have a negative impact on American innovators and harm the U.S. economy.
Canada last week imposed a digital services tax of 3 percent on revenues from online marketplaces, online advertising, social media, and user data services. A Computer & Communications Industry Association Research Center study found that Canada’s digital services tax will likely impose direct losses of up to $2.3 billion annually for U.S. companies and could result in thousands of U.S. job losses.
“I’m disappointed by Canada’s decision to enact these retroactive, discriminatory taxes that will hurt the U.S. economy and the longstanding trade partnership between the U.S. and Canada,” said Rep. Estes.
The new tax on digital services would be retroactive to Jan. 1, 2022, the congressman’s office said.
“My colleagues and I on the Ways and Means Committee are committed to defending American workers, businesses and innovation and have sought – and will continue to seek – to work with U.S. Trade Representative Tai to safeguard against this theft,” Rep. Estes said.
Last year, the congressman joined U.S. Rep. Dan Kildee (D-MI) in introducing H. Res. 268 to express strong opposition to the imposition of foreign digital services taxes that discriminate against U.S. companies. Those taxes, such as those also introduced by France, Canada and Colombia, unfairly target U.S. digital firms and hamper American ingenuity, the lawmakers said.
“The United States will not sit idly by while Canada and other foreign nations attempt to benefit from our economy,” Rep. Estes said.