Last Updated on June 18, 2020, 9:20 AM AST by Anthony Morris
Robert Lighthizer, United States Trade Representative, said on Wednesday that the United States Treasury Secretary, Steven Mnuchin has decided to pull out of the negotiations on digital services taxes with the European Union officials after they had failed to make any progress.
Lighthizer told the US lawmakers that he still believes that an international regime was required to deal with taxation, but the talks with the European nations were not fruitful.
He said during a hearing of the House Ways and Means Committee that they are making no headway, and the Secretary had made the decision that, rather than having them go off on their own, they would just say that they are no longer involved in the negotiations.
Monica Crowley, the Treasury spokeswoman, said that Washington had proposed pausing, not ending the talks among the Organization of Economic Development and Co-operation, countries on digital taxes and for setting rules for the international taxation.
She said that the United States had suggested a pause in the Organization of Economic Development and Co-operation talks regarding international taxation. At the same time, the Governments around the world focus on responding to the coronavirus pandemic and safely reopening their economies.
A source briefed on the letter said that Washington still felt that an agreement was possible during this year.
Washington has been at odds with other countries such as France and Britain over their plans to impose the digital service taxes as a way to raise the revenue from the local operations of big tech companies like Facebook Inc and Google.
Critics say that the firms earn enormous profit from the local markets while they make only a limited contribution to the public coffers. Still, Washington views the taxes as discriminating against the United States firms.
The comments from the United States came after the Financial Times reported that Mnuchin had called for the suspension of the talks in a June 12 letter to the top officials in France, Spain, Britain and Italy, and again threatened the retaliatory action.
Anthony Morris covers stories related to politics and regional developments. His in-depth reporting about governance and reforms makes him stand out in regional journalism, with a deep analysis of political trends and their impact on Caribbean communities.
