// Online sales tax could be harmful to shoppers, new study warns
// Many bricks-and-mortar businesses now have an online presence
A new study has found that the introduction of an online sales tax could impact shoppers and be an operational “nightmare”.
A report by the Institute for Economic Affairs (IEA) argued that it is “inevitable” that online retailers would pass on additional tax to consumers, adding more pressure to the cost of living.
It would also be “a nightmare to administer”, as many bricks-and-mortar businesses now have an online presence.
Therefore, any additional tax revenues “could be offset” to an extent by high administrative costs.
It also said that applying an additional tax to new business models would send a signal that innovations which benefit consumers are somehow to be feared, and penalised.
In May, Marks & Spencer warned the government that an online sales tax would do more harm than good for the high street.
Earlier this year, industry stakeholders suggested a “delivery tax” could be a more workable alternative to an online sales tax, as part of the government’s interim business rates review.
On Monday, Big Four supermarket Asda told the government that introducing an online sales tax will only harm retailers and shoppers already struggling to cope with rocketing inflation.
The grocer was one of a number of retail groups to meet with Lucy Frazer, the financial secretary to the Treasury and the minister responsible for tax policy.