The boss of Tesco has called on internet retail giants like Amazon to pay new sales tax to support shops on the British high street, warning that the current business rates system is ‘unsustainable.’
Dave Lewis, who has been the CEO of Tesco since 2014, suggested in a piece written for The Daily Mail, that high street shops currently facing ‘crippling bills on their properties while battling online competition,’ should get a 20 per cent reduction on their business rates.
His suggestion followed a report that found that the level of vacant shop units has hit its highest number in four years, reaching 10.2 per cent in the first three months of 2019.
“Billions of pounds have shifted online, but the rates system was never devised to account for this,” wrote Lewis. “Because the bill is linked to property – not profit – shops struggling to keep the doors open have to pay up, while larger online business pay just a fraction.
“Our business rates system has barely evolved since 1988, yet the way people shop has changed profoundly. Online retail has grown dramatically, while sales in shops have fallen.
“It is impossible not to notice the increasing stresses in the retail sector, with a long list of household names going out of business in recent years.”
Amazon paid £63 million in business rates in Britain last year, despite sales of $8.8 billion. Meanwhile, M&S pays around £184 million in rates with annual sales of £10.7 billion.