Labour MEP and Former Prime Minister Alfred Sant voted against a resolution  supporting the introduction of a harmonised digital tax in Europe as ‘a matter of non-negotiable principle’. Taxation should remain part of each EU member state’s sovereignty, remarked  the Maltese MEP when explaining his vote against the resolution ‘Digital services tax and non-adoption of a digital tax for the EU and the need for majority rule on taxation’ at the European Parliament.

The Maltese MEP said it is right that digital business, especially that conducted by the GAFA - an acronym for Google, Apple, Facebook, and Amazon  -  be taxed on the same lines as businesses in other sectors of economic activity in the place where they conduct business.  Given the nature of digital activity, where value is being added, where costs are being assumed and where profits are being made constitute matters that lack the clarity found in other economic activities. This makes it possible for GAFA and others to fudge their income statements so as to avoid having to pay taxes due on their profits. In these circumstances it is legitimate to introduce a tax on their sales, where these occur, to curtail and eliminate such tax avoidance — the 4 most powerful American technology companies.

“While this report supports the introduction of such a tax, it does so as part of a strategy by which on a European scale, we move towards a harmonisation of taxation, not least by putting in place the tools that would make such harmonisation easily possible. Also, I doubt whether taxation of sales of digital business need be contemplated on a European, as contrasted to a national scale.”

The report was approved with 451 votes in favour, 69 votes against, 64 abstentions.