New UK tax law may increase price of apps by 20pct
The UK government is seeking to implement a new tax law that may increase the price of apps, downloads, and music by 20%, according to TechCrunch.
A loophole in the country's tax law currently exempts online services from a 20% value added tax. The new tax law is being implemented to address that flaw, 9to5 Mac said.
The new tax law will start taking effect on January 1, 2015. The law's supporters say the change will create fair competition among both local and international businesses. The current higher tax rate for UK-based firms gives them a big disadvantage in the industry, the report explained.
According to The Guardian, the UK government sees a big opportunity to earn an additional £300 million in revenue when the new tax law is implemented. The state wants to take advantage of the growth that the app economy is experiencing to also grow its bank, TechCrunch reported.