Tesco boss calls for tax on online sales

TescoTesco chief executive Dave Lewis has called for a tax on the sale of online goods to prevent the demise of brick-and-mortar stores.

The supermarket boss told The Mail on Sunday that the chancellor, Philip Hammond, should introduce a two per cent charge on goods sold online which could then be used to fund a tax break for retailers.

He said that the failure to impose a so-called “Amazon tax” has led to an “industry” issue and the time has come to “shift the burden of raising the country’s income” away from store chains.

“Three years ago I talked about a potential lethal cocktail of pressures in the retail industry and now you are seeing that come to fruition,” Lewis said.

“The tax burden has reached the point where companies are going bust. Has the government thought through what happens when retail starts to decline and if the job losses start to become significant?” Lewis said.

Lewis said traditional retailers are struggling to cope against rising costs, taxes, higher wages as well as online competition.

According to The Guardian, Philip Hammond acknowledged that the government would need to tax internet giants such as Amazon and Google at the Tory conference last week.

“The global internet giants must contribute fairly to funding our public services,” Hammond said.

“The time for talking is coming to an end and the stalling has to stop. If we cannot reach agreement, the UK will go it alone with a digital services tax of its own,” he added.

The UK retail industry has received a number of blows already this year, including the downfall of Toys R Us and House of Fraser, as well as hundreds of store closures by Marks & Spencer and Mothercare.


1 comment

  1. Peter H posted on October 10, 2018

    With regard to tax Amazon and all other online retailers should be treated the same as other retailers. For example, they should be taxed GST in the country of the purchaser as that is the market to which they are selling, just as bricks and mortar retailers are taxed for GST when they sell products or services at their Australian locations. Many of these online retailers base their operations offshore in tax havens to minimise their tax burden while benefiting from the sale of their products in higher taxed jurisdictions. This undercuts bricks and mortar retailers who are forced to pay tax at the rates of the store's location country where it is typically more costly to do business. In the Australian setting, GST is 10% so Amazon, for example, could provide a flat 10% price reduction on the same groceries bought by a rival supplier at an equal cost price. The wage budget savings made by not having employees on the ground in the country to which they sell is an additional consideration. If Governments want to keep unemployment low, should they consider a slightly higher tax rate for companies that choose to sell goods exclusively online?

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