Germany is contemplating the introduction of a digital tax, estimated at around 10 percent, aimed at major internet corporations like Alphabet (parent company of Google) and Meta (parent company of Facebook and Instagram). A senior official announced this plan on Friday, acknowledging the potential for increased trade tensions with the United States. The core motivation behind this proposal is the pursuit of greater tax justice.

Philip Amthor, parliamentary state secretary in Germany's digital ministry, articulated the government's stance to Die Welt newspaper, stating, "This is a question of tax justice." He elaborated that "Large digital corporations in particular are cleverly engaging in tax avoidance," contrasting this with German businesses that are fully taxed. Amthor emphasized the need for "a fairer system... so that this tax avoidance is addressed," specifically targeting the advertising revenue generated by platforms such as Instagram and Facebook.

Echoing these sentiments, Wolfram Weimer, Germany's media and culture commissioner, confirmed that the government is actively drafting a proposal for the digital tax. Weimer, formerly an editor for Die Welt and other media outlets, told Stern magazine that "the large American digital platforms like Alphabet/Google, Meta and others are on my agenda." He revealed plans to have "invited Google management and key industry representatives to meetings at the chancellery to examine alternatives, including possible voluntary commitments." Despite these discussions, Weimer affirmed, "At the same time, we are preparing a concrete legislative proposal."

The proposed German digital tax might draw inspiration from Austria's model, which levies a five percent tax. However, Weimer indicated that German officials believe a higher rate is justified, stating, "we consider a 10 percent tax rate to be moderate and legitimate" for Germany.

Weimer outlined several underlying concerns prompting this tax initiative. He warned that "monopoly-like structures have emerged that not only restrict competition but also over-concentrate media power. This puts media diversity at risk." Furthermore, he pointed out that these multinational corporations conduct "billion-dollar business with very high margins" in Germany, benefiting extensively from the nation's media, cultural output, and infrastructure. Despite these profits, Weimer asserted, "But they hardly pay any taxes, invest too little, and give far too little back to society."

A significant concern highlighted by Weimer is Germany's increasing reliance on foreign technology, particularly from the US. "Germany is becoming alarmingly dependent on the American technological infrastructure," he stressed, underscoring the urgency by stating that "something has to change now." The proposed digital tax is seen as a step towards rectifying these economic imbalances and ensuring that digital giants contribute more equitably to the societies in which they operate.