Australia considering the introduction of tax for tech giant
Australia is considering implementing an interim tax on technology firms, and on 2 October launched a public consultation to discuss the matter.
The tax is likely to affect digital companies such as AirBnB, Facebook, Google, and Uber.
The nation’s government is considering the introduction of the tax in response to the expansion of the digital economy and the increased benefits companies receive from Australian customers using their digital platforms.
“While digitalisation has delivered significant benefits for Australian consumers and businesses, the government remains concerned that some very profitable, highly digitalised companies pay very little tax in the countries in which they do business,” reads a statement from Josh Frydenberg, Australia’s Treasurer.
However, it is anticipated that the tax could trigger a tax war between the Australian and US governments.
“That creates the possibility of retaliation [by the United States],” Alf Capito, Tax Leader at EY, informed ABC News.
“If we come out with an interim tax against tech companies, then our steel-tariff exemption could be put in jeopardy.”
Another response to the digital tax could be the affected firms passing the additional costs on to customers.
When asked about this, Capito replied: “I think there’s a chance they could do that. Why wouldn’t they?”
“If a particular country imposes a tax for doing business in that country, a company can either wear it, to the detriment of its shareholders, or attempt to pass it on.”
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.