Germany's Possible Digital Levy Sparks Debate and Concerns

Germany's digital ministry is cautious about implementing a digital levy on tech giants, emphasizing international coordination and no consumer price hikes. Culture Minister Wolfram Weimer proposed a 10% levy, but government consensus is pending. Concerns include U.S. backlash and potential price increases affecting digital transformation efforts.

Germany's digital ministry expressed caution regarding a digital levy on tech giants, emphasizing that any tax must be internationally coordinated and should not lead to higher prices for end consumers. Culture Minister Wolfram Weimer had suggested a 10% levy, targeting platforms like Google and Facebook, though specifics remain unclear.

This proposition has yet to find consensus within the government, officials noted. The key considerations for such a levy are targeted design, international coordination, compatibility with EU law, potential domestic revenue benefits, and ensuring consumer prices remain stable, according to a digital ministry spokesperson.

Chancellor Friedrich Merz's anticipated visit to Washington may influence these discussions, given the U.S. inclination against foreign taxing of its tech firms. Industry group Bitkom warned that the levy could increase prices, hindering digital advancements in public services and businesses, highlighting the need to reduce, not increase, financial burdens on digital services.

(With inputs from agencies.)