Canada has decided to cancel its digital services tax (DST), which was scheduled to impose a 3% levy on revenues from foreign digital companies, primarily affecting US tech giants like Google and Amazon. This move comes after criticism from US President Trump, who labeled the tax a blatant attack. By scrapping the tax before its implementation, Canada seeks to prevent potential tariff escalations and revive stalled trade discussions with the US. Experts suggest that the benefits of maintaining strong trade ties outweigh any financial gains from the tax, which could have generated over $2 billion.
Canada has cancelled its digital services tax to encourage the US to negotiate a trade and defense deal, aiming to avoid potential tariffs.
The 3% levy on digital revenue, set to take effect, would have impacted major US companies and generated significant revenue for Canada.
Eliminating the tax may help Canada avoid trade conflicts and preserve vital economic relationships, as it imported and exported significant goods with the US.
Experts suggest that the potential revenue from the digital services tax is outweighed by the costs of trade tensions, making the cancellation prudent.
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