The Computer & Communications Industry Association (CCIA) has sent a letter, in collaboration with five other trade associations, to key members of the U.S. Cabinet. The letter urges swift action from the U.S. government regarding Canada's impending implementation of its digital services tax (DST), which is set to begin on June 30. Additionally, the letter calls for prioritizing the removal of the United Kingdom's existing DST as part of ongoing negotiations.
The signatories emphasize the need for the U.S. to explore all options to persuade Canada and the UK to eliminate their DSTs. They argue that these taxes will lead to billions in lost revenue annually for the U.S., hinder market access, reduce the domestic tax base, and potentially encourage other markets to adopt similar measures.
CCIA has consistently opposed digital services taxes and urged their removal by advocating with the U.S. government. A study by CCIA's Research Center indicates that Canada's DST could result in direct losses of up to $2.3 billion annually for American companies and potentially cause thousands of full-time job losses in the United States.
Jonathan McHale, CCIA Vice President for Digital Trade, stated: "Despite a looming June 30 deadline, the United States and Canada still have the chance to negotiate a resolution to this longstanding dispute — Canada’s introduction of a discriminatory Digital Service Tax." He further explained that such taxes put American firms at a competitive disadvantage and risk significant job losses and revenue reductions for both companies and the U.S. Treasury.
McHale concluded by welcoming "a strong, visible response from this administration" consistent with its stance on DSTs to prevent similar measures from being adopted by other trade partners.