It’s no longer acceptable for web giants to pay a mere 1% in taxes while small businesses are burdened with up to 50%, according to a conference discussing digital economy taxation. The current system, tied to outdated analog models, creates a significant imbalance.
This stark disparity was a central theme at a conference held in the Chapter room of the Senate. Senator Maurizio Gasparri of Forza Italia described the situation as “unacceptable” and warned that failing to address it could lead to the closure of essential public services like hospitals and schools.
Italian small and medium-sized enterprises face tax burdens up to 120 times higher than major web companies, a gap that destabilizes the entrepreneurial landscape.
Consob Commissioner Gabriella Alemanno highlighted this gap, stating that Italian SMEs are taxed disproportionately higher than web giants, creating an imbalance that “undermines the stability of our entrepreneurial system.” Gasparri emphasized the need to end the “tax impunity” of big tech, urging the United States to recognize that a system favoring a few giants at the expense of entire economies is unsustainable.
The fallout of unequal taxation
The discussion also touched upon international tax agreements. Gasparri alluded to the agreement reached at the Canadian G7, which excluded U.S.-based multinationals from the Global Minimum Tax. Fabrizia Pecorella, vice secretary of the OECD, noted that while this allows for existing rules to tax multinationals at 15%, a universal set of common rules would have been preferable.
“It would have been much better to have a set of common rules to tax multinationals in all countries at 15%,” Pecorella stated. “But that’s not the case, and it won’t be so.”
Ireland’s role and the call for harmonization
The conversation then shifted to domestic policies, with Senator Gasparri and Alessandro Cattaneo, a member of parliament, pointing to Ireland as a case study. Many big tech companies, including Google, Apple, Meta, Microsoft, and Amazon, have established their registered offices in Ireland, an EU member state.
Gasparri posed a rhetorical question about engaging with Ireland, suggesting its taxation policies for big tech should align with those of Italy and Portugal. Cattaneo echoed this sentiment, calling for Europe to lead by addressing internal fiscal asymmetries with countries like Ireland, Luxembourg, and Holland. He stressed the need for fiscal harmonization, adding that the Global Minimum Tax, while postponed, is ultimately necessary.
