West: Not easy to tax Facebook

Minister in the Ministry of Finance Allyson West.

WHETHER or not online platforms such as Facebook, Google and Twitter should be taxed by the Government, as suggested by businessman Norman Sabga, is not an easy question to resolve, said Allyson West, Minister of Public Administration and Minister in the Ministry of Finance.

At a recent ANSA McAl event, Sabga largely blamed an $11 million loss by Guardian Media Ltd on lost advertising due to encroachment by global entities which sell online ads in TT to earn revenue, but do not pay tax here. This undercuts local firms which spend on property and workers and pay tax, he had complained.

West told Newsday it was an issue which is grappled with globally.

“To tax an entity, there must be a nexus between the entity itself and the country that wants to impose the tax. So is there a sufficient nexus between Google and TT, other than the fact that the users of Google reside or operate or are present in TT?”

She said unless TT could locate that nexus, the only other option would be to charge users, with all the implications of such a move.

West said the idea of taxing online operators was something worth discussing, but one must bear in mind the basic principles on which taxation was founded.

Newsday pressed, further citing Sabga’s lament of millions of dollars in advertising revenue being lost to social media.

West replied, “No doubt the developments in social media will impact on traditional businesses. The world has been grappling with it for a while now.

“Businessmen have to grapple with options as to how to react. It is not an issue that tax alone can solve.”