Global tariff drive on Google’s capital

The Ministry of National Economy of Kazakhstan has said that all foreign companies that sell services and goods through online platforms will be required to pay Value Added Tax (VAT) to the republican National Exchequer under new legislation. The Republic had imposed 12% VAT on all sales of goods and services through online platforms. According to reports, the Kazak government hopes that it will be able to collect an additional 2 billion tenge per year through imposition of VAT on online trade. The Ministry further said that the Companies would require notifying the government of their readiness to pay VAT, while authorities will detect the amount on the basis of the data of Second-tier banks on the amounts transferred in the context of foreign Internet companies through Merchant IDs.
The Kazak authorities have made a bold decision to increase their national income through imposition of taxes on the income of multinational giants like Google, YouTube, Netflix and other online platforms which generate billions of dollar profit from the countries around the globe but do not pay a single penny to foreign governments. In fact, this initiative had been started by the western nations, earlier the UK had introduced a law namely Diverted Profit Tax (DPT) and slapped 25% tax on online goods and services. Whereas Australia has imposed significant tax through its legislation on Multinational Anti-Avoidance Law (MAAL) during 2015 and also announced up to 120% penalty in case firms shift profit abroad without notice of the government. Similarly, several other nations had introduced taxes on multinational online platforms during the past. Pakistani authorities had imposed only 2 percent tax on online platforms like Google, Facebook, Amazon, Netflix. Pakistan must raise the tax, due to coronavirus online platforms earning billions of dollars. So instead of wasting this golden opportunity, the Pakistani government must raise the taxes on online giants.