// Tesco CEO Dave Lewis called on the government for a 2% online sales tax
// The proposed levy will help fund the cut in business rates as store closure numbers are on the rise
// The Big 4 leader said it was “impossible” not to notice the increasing strain on the retail sector
Tesco chief executive Dave Lewis has called on the government to enforce an online sales tax to help fund the cut in business rates as store closure numbers are ever-growing.
Lewis has called for rates to be cut by a fifth, with the reduction paid for with a two per cent “targeted levy” on online retailers’ revenues.
The proposed levy would be applied to revenue from online sales, rather than on single transactions, so it would be up to retailers whether to pass it on to consumers.
He said the current system was unjust and damaging to the UK’s communities, and warned prices are under pressure which is resulting in store closures.
The chief executive also said that companies are struggling under a system that is “outdated, not fit for purpose, and doesn’t reflect the way people shop today”.
The Big 4 leader said it was “impossible” not to notice the increasing strain on the retail sector, especially as store closures across the UK are ever-growing.
Last week, the Confederation of British Industry president, John Allan said the system is in need of a “fundamental rethink”.
Meanwhile, Lewis wrote in the Daily Mail: “It doesn’t matter whether you are a large retailer such as Tesco, or run an independent corner shop – business rates have a huge impact on every bricks-and-mortar retailer. This is unsustainable.”
Tax rules currently suggest that the amount a business pays in rates is calculated with the value of its physical premises.
Lewis said Tesco has seen its headline rates bill double to £700 million in just 10 years, while the total paid by retailers had ballooned to £7.5 billion.
“Our business rates system has barely evolved since 1988, yet the way people shop has changed profoundly,” he said.
“Online retail has grown dramatically, while sales in shops have fallen. Healthy competition between shops and online is good for customers, and drives innovation.
“But the ability to compete is undermined when the playing field between shops and online is not level.”