Digital service TAX is here Canada, how it may effect you
Foreign IT behemoths are now have to pay a three percent charge on Canadian customers’ revenue, retroactive to 2022, after the federal government approved the law on June 28 through an order-in-council. Is Canada becoming the heaviest taxed country in the World? How will this new digital services tax affect Canadians in the near future?
The American government and business communities on both sides of the border have urged for Ottawa to halt the measure because many of those big companies are American-based. Regardless of the plea, Canadian government decides to tax those digital services giants with 3% tax on revenue earned from Canadian consumers and retroactive to 2022! A hefty chunk of money for sure.
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The federal government has passed a contentious digital services tax that would generate billions of dollars but jeopardize trade relations with other countries by charging the money that foreign companies make in Canada.
A much needed money for Canadian infrastructure and education for sue, but wait a minute! Isn’t this tax going to pull more money out of Canadian consumers pockets? You can bet, it will! Tech giants like Netflix and Amazon will certainly get the money in again through increasing the prices for services offered in Canada. 3% might not seem a lot, but taking in consideration the amount of money Canadians spend on those platforms including the decision to make the tax payments retroactive to 2022, it surely will not be just increase in pennies for Canadians.
Unlike we pay too many taxes already and our affordability is awesome! On the other hand, perhaps more Canadians will stop subscribing to digital services and start enjoying Canadian outdoors a bit more often!? It is free and way better than any digital streaming, but that is just me. For sure, many are not my ideology and opinion. But hey, we are all different.
It is certain that digital services will be more expansive in the future, the decision is everyone’s to make weather they want to continue to subscribe or to drop it for some other activities.
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Over a five-year period, the Parliamentary Budget Office projected last year that the tax would generate over $7 billion in revenue. Revenues of $5.9 billion over five years, beginning in 2024–2025, were projected in the 2024 budget.
Where will the money be spent on? God only knows…..
