TL;DR: India plans to withdraw the 6% ‘equalization levy’ (aka ‘Google tax’) on online ad services by foreign digital firms. This move is part of the Finance Bill, 2025, being discussed in Parliament, and comes amid pressure from the US, which threatened retaliatory tariffs. Earlier, India removed a 2% levy on various digital services in August 2024.
India’s 6% tax on offshore digital ad services, introduced in 2016, is now likely to be scrapped. This tax was applied to online ads provided by foreign companies to Indian businesses. But now, under pressure from the US and to boost trade negotiations, the government is looking to drop it through amendments to the Finance Bill, 2025.
In August 2024, the government already removed a separate 2% tax on a broader range of digital services like cloud and e-commerce, signaling India’s readiness to ease taxation on foreign tech firms. This step is seen as India’s attempt to improve trade relations with the US and attract more investment in the digital sector.
However, critics argue that this move could benefit big tech companies like Google and Amazon while further deepening their monopolies. The working class and smaller players in the Indian digital market could be hit hard by this tax relief which seems to favor wealthy multinational corporations rather than promoting a fair digital economy.
📢 MediaFx Opinion: This decision highlights how powerful countries like the US can strong-arm developing nations like India to protect the interests of their big corporations. Instead of yielding to pressure, India should strengthen its taxation policies to ensure that digital giants pay their fair share while also supporting local startups and the common people’s access to affordable digital services.
What do you think about this move? Should India keep the ‘Google tax’? Drop your thoughts below! 👇💬
