Justin King, formerly Sainsbury’s CEO, has pronounced his stance on the tax paid by major corporations such as Amazon and Ebay.
According to The Guardian, King said it was unfair that that traditional retailers must pay huge rates bills for services such as roads and waste collection, while their online rivals paid little but received the same benefits.
Business rates, he said, are a bigger problem for British retailers than the corporation tax scandal.
Amazon and other US business giant from Starbucks to Google have come under fire for paying little corporation tax in the UK compared to the value of the business that they operate.
But King told the national that for retailers, corporation tax is eclipsed by the huge difference in business rates between firms with chains of stores and online players with just a few big warehouses.
“Business rates are by far the most significant inbalance in the tax system,” he insists. “Business rates for most retail businesses are a much more significant part of the tax burden than any other part of the tax system.”
He added the low level of business rates paid by online retailers in comparison to supermarkets and other major retail chains was accelerating change on Britain‘s high streets.
“A big part of of the advantage non bricks-and-mortar retailers enjoy is their ability to use services that their competitors paid for. They use the roads, they still use waste collection services but they are paid for by the local retailer, through business rates, who has just had that sale competed away from him.
That unbalance is a [big] part of the change we are seeing [on the high street] and clearly has to change at some point,” added King.
“The reality is it is an ever inflating figure paid by an ever decreasing number of people and you only have to draw lines forward to realise that at some point in time the government is going to have to plug that hole in the tax system. ”
