Tesco’s chief executive, Dave Lewis, has called for the introduction of an “Amazon tax” on online sales to prevent more high street chains from going to the wall.
The boss of the UK’s largest retailer said the chancellor, Philip Hammond, should impose a 2% charge on goods sold online and said the failure to tax digital firms properly was now an “industry” issue.
“Three years ago I talked about a potential lethal cocktail of pressures in the retail industry and now you are seeing that come to fruition,” Lewis said in an interview with The Mail on Sunday.
“The tax burden has reached the point where companies are going bust. Has the government thought through what happens when retail starts to decline and if the job losses start to become significant?” Lewis said it is time to “shift the burden of raising the country’s income” away from store chains.
At last week’s Tory conference, Hammond conceded the time was approaching when the government would need to tax internet companies such as Amazon and Google. “The global internet giants must contribute fairly to funding our public services,” he said.
The best way to tax international companies was through global agreements, Hammond said but added: “The time for talking is coming to an end and the stalling has to stop. If we cannot reach agreement, the UK will go it alone with a digital services tax of its own.”
The government has previously said it was considering taxing the revenues of internet firms such as Facebook and Google until international tax rules are changed to cope with digital firms that can shift sales and profits between jurisdictions.
There have been a series of high-profile retail failures this year, including House of Fraser, Maplin and Toys R Us, while household names such as Marks & Spencer, Carpetright and Mothercare have together announced hundreds of store closures.
Lewis said traditional retailers are caught in a stranglehold of rising costs, taxes, higher wages and competition from aggressive online firms. Last year’s business rates revaluation, which added £226m to the retail sector’s burden, has been the final straw for some retailers.
