Czech exporters are pleading with Prime Minister Andrej Babis to amend the current digital tax proposal. They fear it will damage Czech-US relations and bring severe retaliation by US President Donald Trump.
The Chamber of Commerce says the state stands to lose more money over the loss of exports to the US than it will gain with the tax.
The OECD said that 140 world governments, including the Czech Republic, have agreed to start negotiating new rules for an international digital tax. It should be ready by the end of this year.
A European directive is currently being prepared. Czech exporters say global business taxation would best be addressed within the Organization for Economic Cooperation and Development (OECD), which includes the United States.
The United States issued a warning last week that it would introduce retaliatory measures against the Czech Republic due to digital tax. Finance Minister Alena Schillerová isn’t worried about retaliation. The tax will be valid for four years and can be repealed if a global solution is found.