News that the infamous 'Google Tax' might be expanded to more online services is a nightmare scenario for digital service providers like us. Already burdened by a 15% service tax, the additional 6% will create an unrealistic 21% levy on digital services.
Consider the following (courtesy Firstpost.com)
"Besides this, the committee had also recommended to include other services such as advertising on radio and television, designing, hosting or maintenance of websites, digital space for websites, email, blogs,
Due to competition, margins are already thin and many web design and digital marketing companies are struggling for growth and profits. This will be a huge blow for such companies, many of which are already considering shutting down or pivoting.
Established firms such as ours will have to decide whether to pass on the cost to customers or absorb them thus reducing our margins.
While large firms such as Google, Amazon etc have deep pockets to absorb such taxes, smaller businesses in the web design and digital space will struggle if this tax is implemented.
