A windfall tax on IT companies to help small businesses solve the year 2000 software problem? On the face of it, the idea, put forward this week by software auditing firm Prove It 2000, seems to raise as many questions as it answers.
Which companies would be included? How do you identify what proportion of their profits are derived from year 2000 work? What rate should the tax be set at? Would it be legal? How will it be distributed? Can a system be set up to do this without excessive bureaucracy, within a very limited time?
Richard Coppel, Prove It 2000’s chief executive, admits these difficulties. But the idea does have some merit. While companies are being deluged with information on the problem, they are offered little in the way of practical help or financial assistance to implement solutions. Progress has been slow. IT companies are inhibited from approaching customers to help because they fear litigation if they admit there is a problem. A combination of a windfall tax with immunity from legal liability, plus tax incentives to companies shelling out to solve the bug, might offer a way out and get companies on the fast track to a solution.
At the very least, convening a panel of industry and tax experts over, say, two weeks, to brainstorm whether something along the lines of the windfall suggestion could work has considerable merit and could inject a much needed sense of urgency.
The millennium bug could severely affect the whole economy. The deadline won’t move. Arguably, of all the problems facing the Government, none needs more urgent action.