Boris Johnson has pledged to implement an “Amazon tax” in the UK and force US tech giants to pay more tax on their digital sales, despite opposition from Donald Trump.
The British prime minister announced yesterday that he would push ahead with a British digital sales tax ahead of today’s Nato summit.
Under the proposed tax, set to be implemented in April 2020 if the Conservatives win next week’s election, tech giants like Amazon, Google and Facebook would be forced to pay two per cent tax on all domestic digital revenues.
This announcement came shortly after Trump dramatically 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 and change how large US companies are taxed risks drawing similar threats from Trump.
“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,” Johnson said, according to the BBC.
“We need to sort that out. They need to make a fairer contribution.”
This comes amid growing trade tensions between Washington and the EU as the block begins to impose a string of new levies on big tech companies, which Trump claim unfairly discriminate against US companies.
Just last week Amazon was thrown into the spotlight yet again over the amount of tax it pays in the UK, with the opposition leader Jeremy Corbyn telling Jeff Bezos to “just pay your taxes”.
In the US in 2018 Amazon paid nothing in federal taxes despite reporting profits of more than $11 billion.
Earlier this year an investigation by the Daily Mirror 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.
This compares to physical UK retailers like M&S, which paid £65.4 million corporation tax just last year, Tesco which paid £176 million, Dixons Carphone which paid £42 million and John Lewis which paid £43 million.
Amazon has repeatedly denied any wrongdoing, stating that the amount of tax it pays is what is legally required.