Campaigners are urging Prime Minister Andy Burnham to defend the UK's Digital Services Tax (DST) when he meets Donald Trump in New York later today.

Civil society organizations have written to Burnham and Chancellor John Healey, asking them to resist pressure to scrap the tax. Trump regards it as one of the European levies that create unfair trade barriers for US companies and has threatened the UK with a "big tariff" if it keeps the DST.

Introduced in 2020, the DST applies a 2 percent tax to certain revenues from UK users of search engines, social media services, and online marketplaces. It applies to groups generating more than £500 million globally from those activities and more than £25 million from UK users, with the first £25 million of UK revenue exempt.

The tax was introduced to address what the government described as a mismatch between where digital businesses generate value and where their profits are taxed. It is separate from corporation tax rather than a replacement for it.

In their letter, signatories including Tax Justice UK, the National Education Union, 38 Degrees, Global Witness, and Cost of Living Action press the government to keep the DST and extend it to AI companies and other digital services.

They also call for measures to prevent multinationals from shifting profits through low-tax jurisdictions.

Faiza Shaheen, executive director at Tax Justice UK, said:

"Under no circumstances should the UK be cutting taxes for some of the richest corporations to please Donald Trump. Let's not forget, these businesses are often huge monopolies that have enormous power and more money than entire countries. If the UK caves in to this demand, what will Trump and the USA come after next? Burnham should stand strong and strengthen the DST to include booming AI companies, with the revenues invested to ease the cost of living for people all across Britain."

The tax raised £800 million in 2024-25. Its scope includes activities run by companies such as Amazon, Google, Meta, eBay and TikTok.

With government borrowing rising, scrapping the DST would also mean giving up revenue ahead of Healey's first Budget. The campaigners argue that the government should collect more from digital giants, not less. ®