Treasury denies mulling the removal of the £500m digital sales tax

Treasury Philip Hammond Rishi Sunak online sales tax
The Treasury made the statement after a report from Mail on Sunday emerged that Rishi Sunak was considering ditching the tax
// The Treasury denies reports that it is considering axing the £500 million online sales tax
// The online sales tax was launched as a “proportionate measure” so tech giants “pay their fair share of tax”
// The US government has urged the UK to reconsider the tax due to it being too “punitive”

The Treasury has denied reports that it is mulling the removal of a £500 million online sales tax, which was designed by former chancellor Philip Hammond and introduced in March at Rishi Sunak’s first budget.

The online sales tax was launched as a “proportionate measure” so that tech giants such as Amazon and Apple “pay their fair share of tax in the UK”.

Despite this, the government said it was “a temporary tax that will be removed once an appropriate global solution is in place” but ensured it would continue to work with international partners to reach that goal.


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The Treasury made the statement after a report from Mail on Sunday emerged that current chancellor Sunak was considering ditching the tax.

Sources had told the publication that because the tax would only raise around £500 million, it was “more trouble than it is worth”.

The US government has urged the UK to reconsider the tax due to it being too “punitive”.

The tax targets technology and digital companies with UK revenues in excess of £25 million a year, such as Amazon and Facebook.

Sunak and the finance ministers in France, Spain and Italy had signed a joint letter back in June to state that tech giants needed “to pay their fair share of tax”. They added that some of these companies became more profitable during the coronavirus crisis.

The pandemic has created a shift to online shopping after Brits decided to stay home when lockdown was implemented.

Moreover, UK grocers were working on ways to increase their delivery slots as well as speeding up their delivery times.

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