The cost of digital services and goods sold by foreign companies like Netflix will go up under a taxation plan the government wants to put in place next year, experts said Tuesday.

Ottawa said in its fiscal update released Monday it will require multinationals to collect GST or HST on digital products and services, which it said would add up to $1.2 billion over five years.

Sometimes labelled a B次元官网网址淣etflix tax,B次元官网网址� the measure would also apply to other services such as Amazon.com Inc.B次元官网网址檚 Prime B次元官网网址 or the Spotify audio streaming service, as well as digital products such as software applications.

The government says Canadian companies already collect those taxes when they make digital sales, so itB次元官网网址檚 only fair that foreign multinationals should do the same.

KPMG tax partner Joe Micallef said itB次元官网网址檚 likely Canadians will end up paying the taxes collected for the government by foreign multinationals.

B次元官网网址淩ight now, the way in which theyB次元官网网址檙e delivering their services, theyB次元官网网址檙e not responsible for the collection,B次元官网网址� Micallef said.

B次元官网网址淎nd so, effectively, it would mean that these charges would be appearing on (their) invoices.B次元官网网址�

A regular monthly subscription for a streaming service that delivers video or music would be a simple calculation, with the tax rate applied to the purchase price.

But Micallef said it is be more difficult to estimate how much additional tax individual consumers, or businesses, will pay for other types of digital purchases, he said.

Something like gaming software might cost little or nothing itself, but offer the option for subsequent charges to add features that make the experience better.

B次元官网网址淗ow many times? How many transactions? It adds up,B次元官网网址� Micallef said.

Dwayne Winseck, a media industry researcher at Carleton University in Ottawa, also expects companies will add the price of the tax to the total sale price.

B次元官网网址淚 mean, this is really not a very substantial amount, when weB次元官网网址檙e talking about corporate finances,B次元官网网址� said Winseck, who is a professor of journalism and communication.

He said that the term B次元官网网址淣etflix taxB次元官网网址� has become highly politicized and is often used as B次元官网网址渃odeB次元官网网址� for levelling the playing field between U.S.-based digital media companies and traditional Canadian broadcasters.

B次元官网网址淎nd if the idea is to create a level playing field between those two services, then that by all means that makes great sense,B次元官网网址� Winseck said.0

David Paddon, The Canadian Press

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