Rolling back tax for a larger strategic gain

Last week, this column argued the Elon Musk-backed Starlink poses no threat to Jio and Bharti. But one week is a long time and much drama has unfolded since.

- Charles Assisi

Last week, this column argued the Elon Musk-backed Starlink poses no threat to Jio and Bharti. But one week is a long time and much drama has unfolded since. Although it appeared as if there was no drama. No chest-thumping press conference. No policy paper buried in legalese. Just a quiet announcement: the "Google Tax" was being rolled back. This is the 6% levy on digital advertising revenues earned by companies like Google, Facebook, and Amazon. The kind of tax that usually gets buried in budget footnotes. Except this one isn't just any tax. This one had teeth.

Introduced in 2016, the levy was India's early attempt to make digital giants pay up for profiting off Indian users without ever setting up shop here. At the time, it was bold. It said to Silicon Valley: if you want to make money in this market, you'll have to leave something behind. France liked the idea. So did the UK. But the United States? Not so much. Now, with little explanation, the tax is on its way out. The government has been feeling the pressure to do something about it because of how unpredictable Donald Trump and Elon Musk are, say sources who declined to be identified.