Ruth Davidson backs 'Amazon tax' to help support high street shops

Ruth Davidson has lent her support to calls for a so-called “Amazon tax” to even the playing field between online giants and high street shops.

The Scottish Conservative leader warned the high street could “vanish” if the UK Government failed to increase taxation on online firms.

Writing for the Telegraph, Davidson compared the income of online giant Amazon to oil rich Kuwait before lashing out at the firm’s efforts to reduce its tax bill.

“Kuwait’s entire GDP is outstripped by the place you go when you’ve forgotten your nephew’s birthday,” she wrote.

“That’s right, at $117,900 million, the online retailer Amazon had a greater revenue stream than the entire economy of the 'Hollywood of the Gulf' last year.”

Last month it was revealed that Amazon had managed to cut its corporation tax bill to £4.6m, and that further measures to postpone payments on its warehouses had reduced the Treasury take to just £1.7m.

The Scottish Tory leader acknowledged that online firms “offer an attractive product” but said it was the responsibility of the Government to make markets fair.

“Britain hasn’t just believed that markets should be free – successive governments have tried to ensure that they are also fair”, she said.

“Consumer protections, transparent taxation and rules regarding restrictions and monopolies have existed for ages.”

Davidson warned that failure to tackle the imbalance could kill off the high street for good.

“The advance of online firms was designed to offer customers a new way to do business", she wrote.

“But if there isn’t a more even playing field between traditional and online businesses, then internet shopping might become the only choice we have.”

Her comments follow hints from Chancellor Philip Hammond that the UK could pioneer new tax arrangements to force online firms to pay more.

Speaking last week, just hours after high street retailer House of Fraser was saved from administration, he said: “We want to ensure the high street remains resilient and that taxation is fair between businesses doing business the traditional way and those doing business online.

“The system now is unfair because our tax system was designed for a different economy. As the economy digitises, we are going to need to change the tax system to make sure that it is fair to everybody in it.”