Tag Archives: USA

President Trump’s Indo–Pacific Economic Investment Initiative

Indo-Pacific_biogeographic_region_map-enUS Secretary of State Mike Pompeo has laid out a new vision for American economic engagement in the Indo–Pacific, announcing the rollout of a new US regional infrastructure initiative, which, while not explicitly targeting China’s growing economic power in the region, attempts to provide Indo–Pacific countries with US financial and technical alternatives to China. The funds may be modest, yet they remain important; the key question is whether the strategy will be sustained, and whether it will succeed in engaging other US allies as well.

Secretary of State Mike Pompeo has announced the launch of ‘America’s Indo–Pacific Economic Vision’, which will focus on digital economy, energy, and infrastructure investments to the tune of $113 million. While the initiative indicates that the US’s Indo–Pacific Strategy is gaining substance, more will need to be done to convince the region that the US is committed to sustained engagement and that Washington is determined to create a power balance that will allow countries to make the best choices for themselves.

 

The initiative encompasses three main project funding strands: $25 million to expand partner countries’ digital connectivity and US technology imports; $50 million to develop sustainable and secure energy markets across the Indo–Pacific; and $30 million to launch an Infrastructure Transaction and Assistance Network for infrastructure development in the region. It is a not a great deal of money, but it is a significant start and a symbolic gesture.

More: https://rusi.org

 

Difficult and contentious: taxing the digital economy (Australia)

Accountants have been urged to keep a lookout for significant changes to the tax environment as the government considers options for taxing the digital economy.

In Treasurer Scott Morrison’s budget address, he noted how the government’s crackdown on multinationals had brought $7 billion a year in sales revenue and would now be looking towards the digital economy as part of its initiatives to strengthen its tax base.

“The next big challenge is to ensure big multinational digital and tech companies pay their fair share of tax,” said Mr Morrison.

“Over the past year I have been working with counterparts at the G20 to bring the digital economy into the global tax net.

“In a few weeks’ time I will release a discussion paper that will explore options for taxing digital business in Australia.”

Thomson Reuters tax consultant Terry Hayes believes taxing digital business in Australia will continue to be a difficult and contentious issue and suggested that Mr Morrison was looking to Europe for ideas.

“Europe has been taking a lead in measures to tax the digital economy,” said Mr Hayes.

“In March this year, the European Commission proposed to introduce a digital services tax aimed at addressing the tax challenges of the digital economy in the European Union. Companies such as Google and Facebook would clearly be impacted.”

Mr Hayes believes the upcoming discussion paper announced by Mr Morrison might shadow two distinct legislative proposals put forward by the European Commission in March this year.

The proposed long-term solution would allow EU member states to tax profits that are generated in their territory, even if a company does not have a physical presence there. Profits would be registered and taxed where businesses have significant interaction with users through digital channels.

The second option, would be for an interim digital tax, roughly 3 per cent, to cover the main digital activities that currently escape tax altogether. This interim tax would apply to revenues created from activities where users play a major role in value creation.

“However, it is understood there may be some wavering on the proposals as concerns rise among European countries of possible US retaliation over the measures,” said Mr Hayes.

source: www.accountantsdaily.com.au

Making America First in the Digital Economy: The Case for Engaging Europe (Report)

atlantic-councilIn an age of transatlantic tensions over the Iran deal, trade balances, and steel tariffs, digital policy is uniquely poised to offer opportunities for greater US-EU cooperation. At the same time, the digital arena also has the potential to be a policy minefield, with issues such as privacy, digital taxation, and competition policy still unresolved. Making America First in the Digital Economy: The Case for Engaging Europe addresses these challenges and explores how the US-EU digital agenda fits in the larger transatlantic relationship.

Making America First—but Not Alone—in the Digital Economy
For the United States to continue as a leader in the digital economy, it must engage with Europe. Strong and early US engagement could help moderate European policy while ensuring greater compatibility across the Atlantic. That compatibility is essential if the United States and Europe are to succeed in fighting cyberattacks, online terrorism, and criminal networks. It is also key to US and EU future economic success in the competitive global digital marketplace.” excerpt

Written by Atlantic Council expert Frances Burwell, a distinguished fellow with the Future Europe Initiative, this report analyzes the prospects for US-EU collaboration in the digital economy, identifying potential crisis points and next best steps forward.

Report 

Source: http://www.atlanticcouncil.org 

Defining and Measuring the Digital Economy – Bureau of Economic Analysis (USA)

Bea-final-logo-blue-backing The Bureau of Economic Analysis released, for the first time, preliminary statistics and an accompanying report exploring the size and growth of the digital economy. Goods and services that are primarily digital accounted for 6.5 percent of the U.S. economy, or $1.2 trillion, in 2016, after a decade of growing faster than the U.S. economy overall, BEA’s research shows.

From 2006 to 2016, the digital economy grew at an average annual rate of 5.6 percent, outpacing overall U.S. economic growth of 1.5 percent per year.

In 2016, the digital economy supported 5.9 million jobs, or 3.9 percent of total U.S. employment. Digital economy employees earned $114,275 in average annual compensation compared with $66,498 per worker for the total U.S. economy.

BEA includes in its definition of the digital economy three major types of goods and services:

  • the digital-enabling infrastructure needed for an interconnected computer network to exist and operate
  • the e-commerce transactions that take place using that system
  • digital media, which is the content that digital economy users create and access.

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Under this definition, that includes goods and services, such as computer hardware and software, telecommunications services, margins on retail e-commerce transactions, and subscriptions to online streaming services, to name a few.

Because of the limitations of available data, the estimates released include only goods and services that are “primarily digital.” This means that some components of the digital economy, like peer-to-peer (P2P) e-commerce, also known as the sharing economy, are excluded from the initial estimates. P2P transactions such as ride-sharing services rely on internet-enabled devices to match supply and demand, but also have a non-digital component of in-person provision of services.

These new estimates are supported in part by funding from the Commerce Department’s National Information and Telecommunications Administration. The estimates pull out information about the digital economy already embedded in BEA’s core statistics, such as GDP, and are the first step toward a future digital economy satellite account. Satellite accounts, like those for outdoor recreation or arts and culture, complement BEA’s core statistics by focusing on a specific industry or activity.

source: https://blog.bea.gov/2018/03/15/initial-estimates-show-digital-economy-accounted-for-6-5-percent-of-gdp-in-2016/

USA – Cyberspace and Digital Economy Bureau proposal

US Secretary of State Rex Tillerson wants to develop a Bureau of Cyberspace and the Digital Economy, according to a letter from him to Edward Royce, the chair of the committee of foreign affairs.

The bureau, as described in the letter, would help the US lead international efforts in all aspects of cyberspace. As the world, its economy, and its businesses become increasingly digital, a group of informed experts may be necessary to help develop policies in the US and abroad.

“With increasing incidents of disruptive global cyber attacks, including some sponsored by nation states, and the emergence of the digital economy dependent on internet connectivity, U.S. international leadership in this area will be important in the years to come,” Tillerson wrote.

Cyberspace and Digital Economy Bureau proposal