Brussels proposes a digital tax that could bring in 25 billion euros a year

A digital tax proposed by the European Parliament could generate up to 25.2 billion euros a year, making it one of the new potential funding sources for the European Union’s long-term budget.

The Parliament’s new estimate is about five times higher than the European Commission’s forecast. The figures were requested by Czech MEP Danuše Nerudová, who is leading the parliamentary work on the issue.

The proposal comes at a critical moment for negotiations on the EU’s next Multiannual Financial Framework (MFF). Member states aim to reach an agreement by the end of the year, while how to create new sources of revenue remains one of the most debated issues.

According to Nerudová, new taxes are needed to help repay the EU’s common debt and fund new budget priorities.

The Parliament’s estimate includes taxing digital services, online gambling and crypto assets. For the digital tax, Parliament proposes a broader tax base than the European Commission’s, also including services such as streaming and data processing.

The proposal also envisages raising the tax rate from 3% to 5%, and expanding it beyond digital advertising and intermediation services.

However, some member states are skeptical of the measure over the risk of trade tensions with the United States. The concern relates to the possibility that the US administration could respond with new trade measures against the EU.

Nerudová argues that such a tax would create a more sustainable source of revenue for the European budget and would target the large tech companies operating in the EU market.