Digital economy and taxation: the keys of the debate

Within the cycle Challenges of the digital transformation, organized by FAES Foundation, there was a roundtable of renowned experts in this field, including the main researcher of Civismo, Javier Santacruz, who addressed the tax scenario that the digital Era opens up as well as its economic impact. The main topic of the panel discussion was the «digital tax» that the PSOE government wants to approve in Congress within the next few months. The experts made a solid case against this new tax, demonstrating why adding a new 3 percent tax on digital service companies is not a good idea. 

“Spain can become a digital island. We are creating restrictions for trade and for foreign investment, key in a moment in time like ours”.

Javier Santacruz

During the panel discussion, panelists put a special emphasis on the fact that the digital revolution is not a future event, but that we are immersed in it right now. Therefore, the challenges it poses to taxation must be faced as soon as possible. Experts agreed that there are three perspectives to be born in mind when facing the technological revolution: that of citizens, that of public administrations and that of the economy. Technology does not destroy employment, it destroys jobs. The objective of this academic meeting, and the conclusion that the experts repeated on many occasions, is that technological change cannot be seen as a threat to employment but as an opportunity for training. And we should also understand the enormous economic impact it has on the world’s economy.

The most important obstacle to economic growth derived from technology is the State. Technology has brought down almost all borders, but the last stumbling block is the tax borders between countries. In the case of the “digital tax”, great damages will be caused, affecting above all citizens and the economy. This is because taxation should not be considered as mere collection but should take into account disruptive technologies and promote their growth. Instead of leading technological change and putting the necessary tools in place, the Spanish Government is building up walls. The experts also denied, with data, that technological companies are being taxed less than traditional companies, given that this tax would fall on a third of all activities that we can call ‘digital’ in Spain. The conclusion reached after this symposium was that investment must be facilitated, and that tax debates take place globally between states and companies.