Campaigners tell Burnham not to trade away the UK's tech tax to please Trump
Letter lands ahead of the PM's first face-to-face meeting with the US president
A coalition of civil society organizations is urging Prime Minister Andy Burnham to safeguard the UK's Digital Services Tax (DST) during his upcoming meeting with US President Donald Trump in New York. The tax, introduced in 2020, imposes a 2 percent levy on revenues generated by search engines, social media platforms, and online marketplaces from UK users earning more than £500 million globally and £25 million domestically.
Trump views the DST as one of many European levies that create unfair trade barriers for US companies, threatening the UK with a significant tariff if the tax remains in place. In a letter to Burnham and Chancellor John Healey, signatories including Tax Justice UK, the National Education Union, 38 Degrees, Global Witness, and Cost of Living Action, demand the government retain the DST, extend it to AI companies and other digital services, and prevent multinational corporations from exploiting low-tax jurisdictions.
Faiza Shaheen, executive director at Tax Justice UK, emphasized that the UK should not compromise on taxes for the benefit of a few super-wealthy corporations, stressing the potential future targets of Trump's demands. The DST generated £800 million in the 2024-25 fiscal year, primarily from major digital firms like Amazon, Google, Meta, eBay, and TikTok.
As government borrowing increases, scrapping the DST would mean forfeiting vital revenue ahead of the Chancellor's first Budget, with campaigners arguing for increased collection from digital giants instead of a reduction.
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