Amazon shares are trading lower Friday. Meanwhile, the UK’s finance minister, Philip Hammond told Sky News earlier Friday, that the UK Government is considering an “Amazon tax” to ensure online only businesses pay their fair share.
The move is being considered as the UK’s shopping habits change and traditional retailers struggle with a growing preference for online purchases.
By 1515 BST, Amazon shares were 0.20% lower at $1,894.76. The stock has been moving mainly higher in recent weeks.
Speaking to Sky News, Chancellor of the Exchequer Hammond said that as the UK’s shopping habits are changing, high street retailers who don’t have an online presence are paying an unfairly higher share of tax.
And, rather than changing the existing business rates system, he suggested that creating a new online business tax – a so-called Amazon tax – could help bring taxation between online and non-online businesses back into balance.
“More and more of us are buying online. Indeed, Britain has the biggest percentage of online shopping of any major developed economy. That means the high street will change,” Hammond said.
“We want to ensure that taxation is fair between businesses doing business the traditional way and those doing business online,” he said. “That requires us to renegotiate international tax treaties because many of the big online businesses are international companies.”
New tax could go ahead without international agreement
Going into further detail on the potential move, Hammond said that if necessary, the UK could go ahead with a temporary new tax measure, to help support traditional high street retailers and ensure online etailers, pay a fair share.
As to how the online tax could be calculated, Hammond said the EU’s value-based views would be an option.
“The EU has been talking about a tax on online platform businesses based on value generated,” Hammond said. “That's certainly something we'd be prepared to consider.”
The discussion follows news that Amazon payed less UK tax in 2017 than it did in 2016, despite reporting higher revenues and profits.