Spain hopes new digital tax will generate billions in income

Madrid, Spain plans to introduce a new digital tax that would mainly affect major online companies such as Google, Amazon and Facebook, the finance minister said on Tuesday in Madrid.

Spain's leftist coalition agreed on the tax, which it hopes will generate approximately 1 billion euros ($ 1.08 billion) each year, Finance Minister Maria Jesus Montero told reporters of dpa.

The tax would amount to 3 per cent on the local turnover of internet giants who make at least 750 million euros in global revenues, or 3 million euros in Spain.

The cabinet meeting also agreed to introduce a financial transaction tax, which the government hopes could generate a further 850 million euros.

Spain's parliament is to approve the draft laws in the coming weeks, so that they could take force in the second quarter at the latest.

The country is in urgent need of the hoped-for 1.8 billion euros, which are already earmarked in Spain's 2020 budget, although this has yet to be passed.

Brussels has already warned Madrid against raising expenditure on social welfare without having sufficient income to spend.

Spain, like France, which introduced a similar tax, plans to suspend advance payments due until the end of the year, as an exception.

The US government has threatened to impose punitive duties on France, arguing that the new tax puts companies from the US at a disadvantage.

Source: Bahrain News Agency