// Chancellor Rishi Sunak to seek support from G7 allies regarding a new way to tax online retail giants
// He is to meet finance minister counterparts to find a way level the playing field for the UK’s struggling high streets
// Sunak was expected to outline a proposal in last week’s Budget, but he didn’t
Chancellor Rishi Sunak says he is seeking support from the UK’s allies for a new way to tax online retail giants like Amazon.
Days after delivering the Budget, Sunak is looking ahead to the G7 summit in Cornwall in June to meet his finance minister counterparts as he attempts to level the playing field for the UK’s struggling high streets.
“One of my priorities in the G7 this year, which I’ve already started work on, is to try to get international agreement on a new way to tax these companies,” Sunak told The Sun.
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“I spend a lot of time talking to my finance minister colleagues around the world about this.”
The Sun and The Daily Telegraph reported the Chancellor has spoken with US Treasury Secretary Janet Yellen about the possible tax.
Sunak last year brought in a digital services tax, but there have been concerns that online retailers were passing on the cost to independent sellers.
The digital services tax, introduced in April last year, is a two per cent levy placed on revenues of search engines, social media services and online marketplaces which derive value from UK users.
Online retailers such as Amazon are caught because they provide an “online marketplace”, which is defined as a digital service that facilitates the sale of goods and services by matching third-party users.
Speculation is rife that Sunak is seeking an online sales tax of sorts that would be imposed on digital platforms that are sellers themselves, affecting every retailer that has a direct-to-consumer ecommerce operation in the UK.
Sunak was expected to outline a proposal in last week’s Budget, with the aim of levelling the playing field between retailers crippled with business rates through their bricks-and-mortar estate, and retailers that are not thanks to being online-only.
The British Retail Consortium (BRC) has publicly opposed the proposed measure on several occasions, along with other leading industry groups and leaders.
However, no such proposal was outlined in the Budget.
Conservative MP Gagan Mohindra suggested during a debate in the House of Commons last Thursday that the Treasury should look at “wholesale reform” of business rates to help protect city centres and high streets.
“Covid-19 has accelerated the change in our working and buying habits,” he said.
“I’d urge the Chancellor to grasp this opportunity for tax reform to ensure that all businesses have a level playing field.”
with PA Wires