It's time for an 'Amazon tax' on online sales, says Tesco CEO
There's a 'lethal lethal cocktail of pressures in the retail industry' says Dave Lewis
CEO of Tesco Dave Lewis has called for taxes to be levied on products sold online to alleviate the pressures felt by high-street retailers.
In an interview with the Mail on Sunday Lewis urged the Chancellor, Philip Hammond, to impose a two per cent charge - worth £1.25bn - on goods sold on the web.
"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 the money raised through the so-called 'Amazon tax' should be used to fund a tax break for retailers, which he pointed out employ 4.2 million people.
It is time to "shift the burden of raising the country's income" away from physical retailers, he said.
Lewis's comments are likely to have been timed to tie in with remarks made by the Chancellor at the Conservative party conference last week. Hammond raised the possibility of imposing additional fees on online firms, which generally pay a tiny amount of tax in the UK despite significant sales thanks to financial arrangements enabled by their global footprint.
"The global internet giants must contribute fairly to funding our public services," Hammond said, adding that the UK might be prepared to "go it alone" if international consensus cannot be reached.
Business secretary Greg Clark recently hinted business rates for retailers could be reviewed since the sector "makes a big contribution to the community, and to villages, towns and cities".
Approximately 17 per cent of the UK's retail sales are now online. Amazon, the largest online retailer, recently paid 2.3 per cent corporation tax on UK profits of £72.3m, rather than the 19 per cent rate applicable to most businesses in the UK.
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