According to a new analysis, traditional retailers are paying 755% more in business rates than their digital competitors.
Altus Group, a real estate advisory firm, says it owes স্থানীয় 2.91 to the local council for every £ 100 (excluding non-store sales and fuel) earned by major retailers in Great Britain.
For large online-only retailers, however, the total turnover rate per £ 100 sales is only 34p.
Estimates suggest that a 1% revenue-based online sales tax for UK customers, in addition to the £ 2m allowance for smaller companies, could raise about £ 1bn a year.
Robert Heaton, UK president of Altas Group, said: “This revenue could be reduced by around 9% with the aim of ring-fencing and reducing rates for retail, leisure and hospitality premises.”
It comes just days after the government closed a consultation on the possible introduction of a digital sales tax as a way to pay for a reduction in business rates.
The world’s tax authorities have been trying for years to decide how to manage large online companies, such as Amazon, which officially report their British retail sales under lower tax authority.
Kevin O’Bourne, chief financial officer at Censbury, which owns Argos and Habitat as well as its supermarkets, said the government should go ahead with the tax because the current business rate system is “destroying the roads above and below the country”.
But his counterpart at M&S, Eoin Tong, says: This will make it even harder for retailers.
“The solution we need is a practical, realistic reform of business rates and better taxation of players around the world so that everyone pays their fair share.”
Mr Heaton of Altas Group added: “No solution will be easy or perfect, but if left unchecked, there could be significant extinction of highways and loss of local communities.”