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Summary
- UK Finance Minister Rishi Sunak is said to be garnering support from his G7 finance minister counterparts for a new Amazon tax aimed at taxing online retail giants, such as Amazon.
- The move comes ahead of the G7 summit to be held in Cornwall in June and aims to level the playing field for UK’s high street retail sector.
- UK-listed online retail stocks such as Boohoo and Asos closed in the red on 5 March.
UK Finance Minister Rishi Sunak is said to be garnering support from his G7 finance minister counterparts for a new Amazon tax aimed at taxing online retail giants, such as
Amazon (NASDAQ:AMZN) and other e-commerce sites, according to media reports.
UK-listed online retail stocks such as Boohoo (LON:BOO) and Asos (LON:ASC) closed in the red on 5 March, seem to taken the cues from the proposed tax discussion and made a weak start, Boohoo was down by 0.98 per cent to GBX 312.80, while Asos lost around 1.05 per cent and was trading GBX 5,110.00 at 9:35 AM GMT +1 (8 March 2021)
In 2020, Chancellor Sunak had introduced a 2 per cent digital services tax on online tech giants like Amazon to help support high street retail shops which have been severely affected by covid-related restrictions. However, the online sales tax regime has raised concerns that ecommerce retailers were instead passing on the tax burden to the independent sellers on their platforms.
Want to know more? Do read: All About the New Digital Services Tax to Be Levied by The UK Government
G7 Summit
The move comes ahead of the G7 summit which the UK is set to host in Cornwall in June. Sunak said he plans to have an international agreement on the new tax regime, which is aimed at ecommerce giants like Amazon as part of his G7 priorities, according to the Sun.
The new tax regime is one of the 30 new proposed tax changes Sunak plans to announce in March. Moreover, the chancellor is reported to have gained US Treasury chief Janet Yellen’s support for talks on how the proposed online retail tax would function.
Amazon’s UK sales jumped by 51 per cent in 2020 to £19.5billion due to customers switching to home deliveries amid the national lockdown. However, the ecommerce giant paid only £14.5million in corporate taxes in 2019.
Sunak’s proposed Amazon tax will require up to 37 states to be signatories for an international treaty. Multinational firms have complex, often offshore based systems, thus making it more difficult to calculate their total revenues.
Online retail stocks performance
UK-based online clothing company ASOS plc’s (LON:ASC) shares closed at GBX 5,164.00, down by 4.97 per cent as of 5 March. While FTSE AIM 100 listed British online clothing store Boohoo Group PLC’s (LON:BOO) stock prices closed at GBX 315.90, down by 4.16 per cent on 5 March.
Comparatively, the broader index FTSE AIM 100 closed at 5,740.04, down by 1.06 per cent, for the same period.
