GOP chairman: UK’s plans for tax targeting tech companies is ‘troubling’

House Ways and Means Committee Chairman Kevin Brady (R-Texas) on Wednesday criticized the United Kingdom’s plans for a digital services tax, arguing that the tax would unfairly target American technology companies.

“The United Kingdom’s introduction of a new tax targeting cross-border digital services — which mirrors a similar proposal under consideration in the European Union — is troubling,” Brady said in a statement. “Singling out a key global industry dominated by American companies for taxation that is inconsistent with international norms is a blatant revenue grab.”

{mosads}The U.K. on Monday announced plans to introduce a digital services tax in 2020 that would have large technology companies paying a tax of 2 percent of revenues in the country. Other European countries have also expressed interest implementing a similar type of tax, frustrated with the fact that internet companies largely are not paying taxes in their jurisdictions.

But U.S. policy members and businesses have expressed concerns about individual countries imposing digital services taxes. The U.S. Chamber of Commerce earlier this week said that a tax would discourage innovation, and Treasury Secretary Steven Mnuchin has said that a tax shouldn’t single out any specific industry.

Mnuchin said last week that he’s working with other countries in the Organization for Economic Cooperation and Development (OECD) on issues relating to tax-base erosion and says the issues aren’t specific to technology companies.

Brady said that discussions among members of the OECD shouldn’t be preempted by actions from individual countries.

“If the United Kingdom or other countries proceed, that will prompt a review of our U.S. tax and regulatory approach to determine what actions are appropriate to ensure a level playing field in global markets,” he said.