Research On The Economic Effects Of Digital Services Tax

In recent years,services based on the Internet have been emerging,but it has brought unprecedented challenges to the existing tax rules.The tax issue of digital services has aroused great concern around the world.Some countries have taken the lead in collecting a unilateral digital services tax.The European Union and OECD have proposed a multilateral digital services tax.For a long time,academic circles have focused on the rationality of digital services tax and the research of its macroeconomic impact,but few have studied the economic effects of digital services tax from a quantitative perspective,which limits the research perspective of digital services tax.The main purpose of this study is to quantitatively analyze the economic effects of digital services tax,explore the impact of tax rate changes on the economies of countries and regions,and propose policy recommendations for China to deal with digital services tax.The conclusions of this paper are as follows.First,economies have conflicting interests under different tax rates on digital services.From a GDP perspective,India,Singapore and South Korea are most favourable in a unilateral taxation pattern,the US,EU,China,Japan and Canada are most favourable in a digital services tax rate of10%,and the UK is most favourable in a unilateral taxation pattern and a tax rate of3%.From an economic welfare(EV)perspective,India,Singapore,Japan,Canada and Korea are most favourable in a unilateral pattern,the US and the UK are most favourable at a 3% tax rate,and the EU and China are most favourable at a 10% tax rate.From a terms of trade perspective,India,Singapore,Japan,Canada and Korea are most favourable in a unilateral taxation pattern,the US is most favourable at a tax rate of 3%,the EU and China are most favourable at a tax rate of 10%,and the UK is most favourable in a unilateral taxation pattern and a tax rate of 3%.Secondly,a digital services tax is beneficial to the home country in a gaming scenario,i.e.when other countries have already introduced a digital services tax,it is only when the home country also imposes a tax that the loss of benefits is reduced.Third,a digital services tax has a negative impact on the import and export of digital services,with economies with larger digital volumes being more affected.Fourth,there is a pattern of resource flows between industries,usually shifting between digital services and industry in response to changes in tax rates.China is a big country in digital trade.In order to cope with environmental challenges,this paper puts forward three suggestions.1.Strive for the voice of digital services tax.In order to protect its own interests,China should pay attention to international exchange and coordination,and strive to have a voice in the international tax pattern.2.Prepare unilateral taxation options for the digital services tax in advance to increase domestic gains in gaming scenarios.3.Enhance the competitiveness of domestic digital services industry.The digital services tax is conducive to enhancing the comparative advantage of China’s digital services.China should seize the opportunity to implement the incentive policies for the digital services industry and further strengthen its comparative advantage.4.Promote highquality development of the industrial sector.The development of the digital services industry is often at the cost of resources flowing out of the industry.Although China is an industrial power,in the long run,the industry may be adversely affected.China should adopt policies to encourage high-quality industrial development and further optimize its industrial structure to avoid the loss of industrial output.