Pinned Lexanndine T. Liberia 1 Question 0 Answers 0 Best Answers 21 Points View Profile 1 Lexanndine T. Beginner Asked: May 3, 2020In: Economics Digital Tax 1 Should tech companies pay taxes to countries from which consumers of their products or services are located? Is it wise, considering economic growth and the incidence of taxation? question Share Facebook 2 Answers Voted Oldest Recent Stanley Michael Oppong 25 Questions 30 Answers 1 Best Answer 94 Points View Profile Stanley Michael Oppong Teacher Added an answer on May 7, 2020 at 8:04 am I wish I were an economist to respond with a clear understanding of all of the underlying factors, but here is my opinion: the digital economy is as relevant as do local economies of countries, and whilst each is not void of the detrimental effects of the other, however, one of the major disadvantages local economies are confronted with is the fact that those digital companies are reducing taxes governments generate by gradually, if not almost, replacing local businesses with their products. But here is a contribution of tech companies (digital companies) which by their operations may (as others may think) offset the reduction of taxes governments annually incurred around the world: their products (eg. smart electronics etc.) are championing the efficiencies of companies or organizations in those countries and as well deepening the acquisition of personal development —this cut across every sector, educational, agricultural and a lot more. In essence, they are contributing more which should not be overlooked; however, taxes need to be paid by those companies because they are virtually and physically operating and offering services to millions of customers which increases their streamline revenue and reduces that of governments. Hope it helps. 0 Reply Share Share Share on Facebook Share on Twitter Share on LinkedIn Share on WhatsApp Tyrone D. Garyon Added an answer on May 5, 2020 at 11:00 pm Taxes particularly have positive effects on countries economic growth. By this the fiscal capacity of countries are enhanced for the provision of public goods and services. However, taxes should not be levied on tech companies for the same reason of enhancing economic growth. Research have shown that telecommunication companies provide the tools for modern businesses. They enables companies to communicate effectively with customers and deliver high standards of customers services, as well as collaboration between different departments in solving complex problems; a recipe for productivity. Additionally, in Sajjah Hossine Sharif publication,”Telecommunication and its impact over the Economic Development of SAARC Countries”, he referred to telecommunication as the blood flow of the modern economy which intensifies the productivity level that will in return make contribution toward the various important economic factors like increasing the growth rate of GDP or GDP per capita. He further stated and it has been proven that the overall economic activities of financial institutions, credit market, stock market, etc, largely depends on the utilization of the advanced technology of communication. As a result telecommunication ensures the continuous flow of the additional value in the GDP in terms of GDP growth or increase in the GDP per capita. Therefore the imposition of taxes on tech companies may lead to higher cost of communication or service provided by tech companies, which may lead to decrease in productivity, affecting economic growth. Based on these, I am of the opinion that considering economic growth,it is not wise for tech companies to pay taxes to countries from which consumers of the products or services are located. 0 Reply Share Share Share on Facebook Share on Twitter Share on LinkedIn Share on WhatsApp Leave an answerLeave an answerCancel reply Featured image Select file Browse Save my name, email, and website in this browser for the next time I comment.