Donald Trump has his eyes on Britain’s Digital Services Tax (DST). The tariff-touting US President insists that the tech firm tax must be scrapped if the UK is to have the ‘deep’ trade deal on technology it desires. So far the government has demurred, but, with Keir Starmer disclosing last week that there are ‘ongoing discussions’ about the tax, it may yet capitulate. I think it would be foolish to do so.
Trump thinks the tax is a punitive one aimed directly at the US. It’s true that big US tech firms are the largest payers. But as the shock emergence of Chinese firm DeepSeek proved earlier this year, there’s no reason to assume the next trillion-dollar tech business will come from California, and the sources of income from the DST are likely to diversify over time.
Do we really want to give Donald Trump veto power over UK fiscal policy?
Trump also thinks the DST means US firms will pay higher average rates of tax in the UK, putting them at a competitive disadvantage to domestic firms.
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