Canada Halts Digital Tax Plan
(MENAFN) Canada has decided to pause its plan to implement a digital services tax (DST) aimed at major tech companies, in an effort to revitalize stalled trade negotiations with the United States.
The move marks a reversal just days before the tax was scheduled to be enforced.
The 3 percent levy, approved into law last year under the administration of former Prime Minister Justin Trudeau, was intended to take effect on Monday.
It would have been retroactively applied to earnings from 2022 through 2024 and mainly affected American tech giants such as Amazon, Google, and Meta.
These corporations stood to face an estimated collective bill of USD3 billion due to the measure.
“Today’s announcement will support a resumption of negotiations toward the July 21, 2025 timeline set out at this month’s G7 Leaders’ Summit in Kananaskis,” Canadian Prime Minister Mark Carney stated in a declaration released on Sunday.
“Canada’s new government will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses,” he further emphasized.
Prime Minister Carney and US President Donald Trump had agreed earlier this month at the G7 gathering to reinitiate trade discussions.
During the summit, Carney mentioned they had mutually committed to concluding a fresh economic pact within a 30-day period.
Canadian Finance Minister Francois-Philippe Champagne expressed on X late Sunday that the decision to drop the tax would enable Ottawa “to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians.”
Just two days earlier, US President Trump had criticized the tax as a “direct and blatant attack on our country” and had warned of terminating all ongoing trade negotiations between the neighboring nations.
He also threatened to introduce fresh tariffs on Canadian exports within a week.
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