A digital sales tax has been proposed by the Opposition to generate extra revenue.

Cole Simons, the Leader of the Opposition, expanded over the weekend on his comments in his Reply to the Budget, delivered on Friday in the House of Assembly.

Mr Simons, also the One Bermuda Alliance shadow finance minister, said digital taxation on companies such as Google, Facebook and Amazon had been looked into by many member countries of the Organisation for Economic Cooperation and Development.

He added the move would make corporations “pay their share under international tax rules, after the coronavirus strained many national budgets”.

Mr Simons said the tax was being reviewed in the United States, Britain and the European Union, including France, Belgium and Norway – and that some had already introduced digital services taxes.

He added: “The One Bermuda Alliance takes the view that Bermuda should examine this area of taxation as well.

“As we all can attest that during 2020, these multinational companies were well supported by Bermuda and her people.

“We used their online shopping services, Zoom calls, WebEx calls, live streams, and other online broadcasting and TV services.”

Mr Simons said the island should consider the introduction of its own version of Britain’s 2 per cent Value Added Tax on digital services, which came into force in April 2020.

He added: “We could apply a percentage taxation to the gross revenues of businesses providing social media services, search engine services or the online marketplace to Bermuda based users.”

Mr Simons said the tax could cover everything from radio and television broadcasting services to content for “simultaneous listening or viewing by the general public on the basis of a programme schedule by a person that has editorial responsibility”.

He also proposed a tax on internet live streaming sent out at the same time on radio or television, as well as a range of telecommunications services, including fixed and mobile telephone and videophone.

Mr Simons said internet phone services operating in Bermuda could also be taxed, from free internet-to-internet voice and video calls to voice mail, three-way calling and other call management services.

He added regulations could also be extended to “e-services that you supply electronically”.

The tax would cover images or text from photos and e-books to digitised documents such as PDF files.

Mr Simons said the island could reap revenue from supplies of “music, films and games, including games of chance and gambling games”, along with programmes on demand, software and software updates, and distance maintenance of programs.

A digital VAT could cover online magazines, web hosting services and advertising space on websites.

But Mr Simons proposed a tax exemption for use of the internet for supplies of goods where an order and processing is done electronically, supplies of physical items such as books, newsletters, newspapers or journals and services such as lawyers and financial consultants advising clients through e-mail.

He also suggested no tax on booking services for entertainment, hotels and car hire and services such as remote learning.