The tax will be created to ensure established tech giants, rather than start-ups, shoulder the burden, Hammond told parliament.
The higher rate was already much lower in Scotland, at £43,430, and if there are no changes in the upcoming Scottish budget it would mean that someone earning £60,000 would pay £1,660 more in income tax if they live north of the border. He said that while a global agreement on how digital taxes shall be implemented would be an ideal solution to the issue, talks at a global level have been slow.
The U.K.is set to become the first developed economy to impose a tax that specifically targets large technology companies.
And it warned that tax rises are "all but inevitable" in the longer run to pay for the pressure on the NHS of Britain's ageing population.
The new UK Digital Services Tax to be introduced in April 2020 is a "narrowly targeted tax" on the UK generated revenues of digital platforms.
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The Chancellor suggested that a Brexit deal could trigger more tax cuts and increased public service spending. The tax would only apply to profitable companies, but could be abolished if members of the Organisation for Economic Co-operation and Development (OECD) can agree a formula for taxing internet giants.
There has been particular concern in Britain about online shopping giants such as Amazon undercutting traditional retailers.
Monday's budget forecasts showed that Hammond was spending most of an unexpected tax windfall this year, rather than putting it towards reducing debt faster.
Facebook earlier this month said its British tax bill tripled to £15.8 million a year ago compared with £5.1 million in 2016.
The response: The tax has been broadly well received in the United Kingdom, where there's huge demand to address the undertaxation of big tech companies.
"Fiscal Phil" has targeted online tech giants by announcing a new digital services tax in his Budget, promising to "deliver worldwide corporate tax reform for the digital age".
CIOT asserted that the existing principles of worldwide tax law remain to be the best way to tax the global profits of multinational companies.