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INDUSTRY FOCUS

Will Boris impose tax on digital sales?

The acronym BORIS – buy online return in store – may have passed into retail parlance, but will newly-elected prime minister Boris Johnson follow up on the pre-poll pledge to impose a tax on digital sales and face a potential tariff confrontation with the White House?

In the run up to the December 12th poll, Boris Johnson told voters at the hustings that a Conservative majority Government would implement an 'Amazon tax' in the UK, forcing US tech giants to pay more to the Treasury on their digital sales, despite opposition from Donald Trump.

Under the proposed tax, set to be implemented in April 2020, digital platforms such as Amazon would be forced to pay two per cent tax on all domestic digital revenues.

The announcement came shortly after Donald Trump, the US president, threatened to impose 100 per cent tariffs on $2.4 billion of French goods to punish the country for implementing a similar tax, charging tech companies three per cent on domestic digital revenues.

Johnson’s move to side with French president Emmanuel Macron potentially risks drawing similar threats from across the Atlantic.

“On the digital services tax, I do think we need to look at the operation of the big digital companies and the huge revenues they have in this country and the amount of tax that they pay,” said Johnson

“We need to sort that out - they need to make a fairer contribution.”

This move follows growing trade tensions between Washington and the EU, as member states begin to impose new levies on big tech companies, which Trump has claimed unfairly discriminate against US companies.

During the Election 2019 campaign, Amazon was criticised by Jeremy Corbyn, with the Labour leader telling chief executive Jeff Bezos to “just pay your taxes”. Earlier this year it was revealed that Amazon had paid a total of £61.7 million in corporation tax over the past 20 years, despite making a total UK turnover of around £7 billion.

Amazon has repeatedly denied any wrongdoing, stating that the amount of tax it pays is what is legally required.

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