- Digital Tax – will it save the high street retailer?
Digital Tax – will it save the high street retailer?
Author: John Taylerson
Government ministers, high street retailers and other vested interests want a levy or tax of some sort to “level-up” the high street retailers against the internet retailers who they claim have an unfair advantage.
High streets have been in decline for several years probably tens-of-several years. Why?
People shop in high streets less often; why?
People found it more convenient to shop at out-of-town retail parks because the parking was easy and free, they could combine it with leisure activities and that meant it became an easy day out for families.
Then there is the internet. The ability to access shopping on-line meant you didn’t even have to leave the house unless you were sick and needed a doctor or the car needed petrol for work on Monday, unless its electric in which case stuck at home plugged-in.
A high street in an old town near me used to have the doctor’s surgery in the high street. Lots of people (mainly those with age and infirmity) would visit that high street (using a bus service that no longer exists) and go to the post office, the co-op and a shoe shop and a hairdresser and a charity shop and a café and a…. you get the picture. The remaining bus now carries them to new out-of-town surgery that means they cannot shop on the high street. The high street missed them, a lot.
The internet hasn’t (yet) replaced the doctors. But the internet has replaced the need for shopping in the old sense. If I visit a supermarket on-line I get my shopping delivered so I have saved the roads, congestion, avoided people who can’t drive or park in supermarket car parks and I have more leisure time to wash a car I have to keep plugged-in at home.
But wait; I am to be taxed on this inactivity. I am to pay extra for Amazon/Waitrose/Argos et al to deliver my shopping because existing high street shops don’t like that the world has changed? And yes, I am the person who will pay the tax, not the shops, not the delivery companies, me! It will appear as an amortised cost on all those on-line products otherwise what was the point. The high street shops want a ‘digital-tax’ to stop the advantage of a lower-overhead business that doesn’t pay exorbitant business rates on high street properties to stop the on-line businesses having a cost advantage that they share with their customers? It can be perhaps better described as a tax on innovation, or a tax on marketing, a tax on convenience, a tax on not clogging the roads up by using an on-line delivery service?
Why didn’t we tax supermarkets when they innovated the doorstep milk delivery business out of existence? Or the supermarkets who offered fuel and put lots of little petrol stations out of business? Rhetorical question? Well maybe not, maybe we should ask that question or one along the lines of is this a tax on the future? A future we want to stop?