UK Takes on Big Tech with Potential Global ‘Amazon Tax’

LONDON, ENGLAND - OCTOBER 13: British Prime Minister Boris Johnson and Chancellor Rishi Sunak head to the weekly cabinet meeting at the British Foreign and Commonwealth Office on October 13, 2020 in London, England. The Prime Minister chairs first full meeting of the government's decision making unit after announcing their …
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British Chancellor of the Exchequer Rishi Sunak is planning on marshalling a global effort among industrialised nations to introduce a so-called ‘Amazon tax’ in response to online companies reaping the rewards of restrictions on small businesses during the pandemic.

The Chancellor is looking to come to an agreement among nations on how to implement a global tax on online companies before the G7 meeting in Cornwall this June.

Implementing such a tax would require global cooperation, as the company is currently taxed under international treaties through the Organisation for Economic Co-operation and Development (OECD).

Sunak has already spoken about the issue with United States Treasury Secretary Janet Yellin, who is said to have expressed “openness” to the idea of implementing an Amazon tax.

“One of my priorities in the G7 this year, which I’ve already started work on, is to try and get international agreement on a new way to tax these companies. I spend a lot of time talking to my finance minister colleagues around the world about this issue,” the Chancellor said per The Telegraph.

An insider at the Treasury added: “The US has signalled now an openness to engage constructively in the debate and try to reach resolution on it, which is really positive. He has spoken to Janet Yellen specifically about this.”

The online sales tax is among 30 planned changes to the British tax code to be introduced by Mr Sunak in the Tax Policies and Consultations Update on March 23. The government is currently seeking to find revenue to pay back the massive public spending during the pandemic, which is expected to total £407 billion, paid for with £355 billion in government borrowing.

Amid the economic devastation wrought by the Chinese coronavirus and the ensuing draconian government lockdowns, Amazon saw its revenues soar in the UK.

In 2020, the online retailer saw its revenues jump from $17.5bn (£24.22bn) in 2019 to $26.5bn (£19.3bn) in 2020. Yet the company is only expected to pay the British government £71.5m in business rates, representing just 0.37% of its sales, according to the BBC. This is a far lower rate than most businesses are forced to pay in the country.

The British government is also considering placing regulations on other online ‘Masters of the Universe’ companies such as Facebook and Google. The government is said to be thinking of following the lead of Australia in forcing the tech giants to pay news publishers for their content.

Google and Facebook account for around 80 per cent of all digital advertising in the UK. On the £1.65 billion in British revenues in 2019, Facebook merely paid £28.5 million in taxes.

Amazon has sought to expand its hold over the British economy, opening its first Amazon Fresh ‘checkout-free‘ supermarket in London this week. Instead of paying a cashier for groceries, customers instead check in with a smartphone app that tracks what they purchase and charges them through their Amazon account.

The civil liberties campaign group Big Brother Watch said that the shop provides customers with a “total-surveillance shopping experience.”

“The store takes huge amounts of personal data with sensors and trackers – what happens to it? Customers should know,” Big Brother Watch said.

Amazon is also plotting to also open brick and mortar bookstores as well as a series of “4-star” shops, which will sell products that have received over a four-star rating on their site.

Meanwhile, an estimated 250,000 small businesses are expected to collapse this year as lockdown measures are expected to continue in some form until the summer.

Follow Kurt Zindulka on Twitter here @KurtZindulka

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