Reeves: It’s wrong that Amazon pay less tax than high street businesses

Labour’s shadow chancellor has taken aim at Jeff Bezos and Amazon for paying less in tax than high street businesses.

“If you can afford to fly to space, you can pay your taxes here on Earth,” Rachel Reeves told the Labour party conference in Brighton on Monday.

Ms Reeves made the remarks as she called on the Government to increase the digital services tax to 12% for the next year, to make sure online companies like Amazon are paying their fair share.

Ms Reeves insisted the whole system of business taxation is not “fair” or “fit for purpose”, adding: “How can it be when bricks-and-mortar, high street businesses are taxed more heavily than online giants? High street businesses pay over a third of business rates, despite making up only 15% of the overall economy.

“But when Amazon’s revenues went up by almost £2 billion last year, how much did their tax go up? Less than one per cent. If you can afford to fly to space, you can pay your taxes here on Earth.”

The shadow chancellor also said the digital services tax rise would help the Government freeze business rates – a move that would give small and medium-sized businesses a discount next year.

She said: “Today we are calling on the Government to freeze business rates next year to increase the threshold for small business rates relief, giving small and medium-sized businesses in all sectors a discount next year.

“To pay for those measures, the Government should increase the digital services tax to 12% for the next year, to make sure online companies that have thrived during this pandemic are paying their fair share.”

During her speech to conference, Ms Reeves also pledged that a Labour Government would eventually scrap business rates, the tax paid by companies, after a gradual phase out.

Labour’s business tax reform would look to shift the burden from the high street to online giants, and end the tax relief afforded to private schools due to their charitable status.

An Amazon spokesman said: “Last year, we made a total UK tax contribution of £1.55 billion – £492m in direct taxes and £1.06bn in indirect taxes.”