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Tax on E-Commerce Sales Could Increase Costs for Consumers

28 July 2020 - 23:33 by Paul Tissington

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The government could implement a two per cent tax on retail sales made via safe shopping online as part of a wider review of the business rates system, with the proposal not only generating revenue for the Treasury but also being used as a measure to prop up the high street as bricks and mortar sales continue to suffer.

A consultation on this proposed change is open now, and members of the public are invited to submit their input, although the extent to which consumers will get involved in determining the outcome of this remains to be seen.

The Guardian reports that a number of retailers have already pointed out that the proposed tax would make products more expensive for shoppers who chose to use e-commerce sites to make purchases.

There is also the suggestion that the tax would not be applied to the goods themselves but rather to the delivery process by which they are shipped to customers. This could make click and collect a more appealing option and also mean that bricks and mortar store visits rise if such a change was implemented.

The annual haul achieved by taxing online purchases at two per cent would be £2 billion, according to government estimates.

Some retailers are eager to see this kind of levy put in place, with Amazon being singled out as one of the main foes in the fight to save the high street and improve the competitiveness of the e-commerce market in the UK.

Certainly over the course of the recent coronavirus lockdown there was a significant spike in online sales, of which Amazon was one of the major beneficiaries, even if the online retail giant did claim that it had also incurred massive costs in order to adapt its operations to cope during this challenging time.