European Commission President Jean-Claude Juncker has defended plans for a new digital tax for global technology companies.

Speaking to MEPs in Strasbourg, he said the proposed digital tax is "not about raising or lowering taxes", but is about "tax fairness".

The European Commission proposed the tax earlier this year in response to claims that so-called tech giants have an average effective tax rate that is half of that in the traditional EU economy.

Mr Juncker said it was unfair that ordinary SMEs pay a tax rate of 30%.

"We need to address this," he said.

Around 200 companies, such as Google, Facebook and Amazon, are expected to be effected by the new tax, which could yield round €5 billion.

Taoiseach Leo Varadkar has already indicated Ireland's objection to the tax at EU level, warning that the proposal for a 3% levy was "flawed".

The Revenue Commissioners recently estimated that the tax could cost the Irish economy between €120m and €160m a year.