A bipartisan group of House legislators on the Ways and Means Committee is urging the federal authorities to combat Canada’s unilateral imposition of a digital services tax (DST).
The lawmakers, led by U.S. Rep. Darin LaHood (R-IL), a co-chair of the Digital Trade Caucus, said the tax goes against the global consensus and will hurt American interests.
“We write as Members of the Ways and Means Committee to express our disapproval of Canada’s decision to move forward with a digital services tax that, if imposed, would seriously harm American companies and workers,” the members wrote in a letter to the leaders of the U.S. Treasury Department, the U.S. Trade Representative, and the Organization for Economic Cooperation and Development. “We urge you to impress upon your counterparts in Canada that its unilateral approach is discriminatory and, if enacted, could face significant consequences.”
The letter was signed by members of the committee and the effort is spearheaded by LaHood along with U.S. Reps. Suzan DelBene (D-WA), Beth Van Duyne (R-TX), and Bill Pascrell, Jr. (D-NJ).
“The Biden administration pushed to extend the moratorium on DSTs to allow more time for negotiations on a multilateral convention addressing the establishment of taxing rights for market jurisdictions. If Canada chooses to proceed with its DST despite this moratorium, that choice would be risky and may damage bilateral relations with its largest trading partner. The decision by nearly all economies participating in the OECD’s two-pillar process to extend the moratorium reflects a broad international consensus that unilateral DSTs are counterproductive,” they added in the letter.
The lawmakers seek an update from the agencies on their progress by Oct. 3.