Canadian streaming service users may be subject to a new government fee currently dubbed the ‘Netflix tax’.
Currently, the Canadian streaming services model charges tax to customers, with the exception of international giants including Netflix and Amazon Prime.
According to a note obtained by the CBC, the federal government is moving towards the so-called ‘Netflix tax’. A briefing note prepared for Heritage Minister Melanie Joly supports charging a sales tax on digital monthly subscriptions. The briefing lists multiple countries that recently introduced efforts to collect sales tax from companies including Amazon, Netflix, and iTunes. Countries in the list include Australia, New Zealand, South Africa, and Japan.
The note mentions that not charging a sales tax on foreign content services is “unfair” as it serves as a disadvantage to domestic competitors.
The note further states that it “represents a significant loss of potential tax revenue for government”.
“Specifically, the requirement to charge customers sales tax can make the goods and services of domestic digital businesses more expensive than those of offshore business that do not comply with the appropriate sales tax regime.”
The news is likely perceived as a good thing for Canadian media creators.
Still, you can’t blame the consumer groups and few Internet providers that will be opposed to the decision.
Are you for a Netflix tax? Let us know in the comments below.
