Taxes meant to hit Big Tech billionaires are actually getting paid by your local mom-and-pop shops and you, the customer.
March 27, 2026
Original Paper
The Economic Incidence of Digital Services Taxes: Who Really Pays?
SSRN · 6207718
The Takeaway
While politicians claim Digital Service Taxes (DSTs) extract money from multinational corporations, this study found that firms simply raise fees for advertisers and users. Instead of being a progressive tax on wealth, it often acts as a hidden sales tax on the local digital economy.
From the abstract
This study investigates the economic incidence of Digital Services Taxes (DSTs) in emerging and developing economies by examining how tax burdens are distributed among multinational digital firms, consumers, small and medium enterprises, and platform workers (Eke 2024; Hale 2024). Using secondary data analysis, comparative policy evaluation, and institutional review, the research assesses pricing responses, compliance patterns, and administrative practices following DST implementation (Olatinsu