E-commerce companies that profited from the coronavirus crisis are facing double taxation

The UK government is considering increasing taxes on tech companies and online retailers that have profited hugely from the coronavirus pandemic, according to a leaked email published in The Sunday Times.

The government has called together companies to discuss how to collect online business taxes, and is also planning a one-off " excess profit tax " for companies whose profits have skyrocketed due to the epidemic. It is reported that this part of the tax will not be announced in the budget announcement released on March 3, but the tax will be announced later this year.

Bloomberg reported that due to the successive blows to the British economy from the new crown and Brexit, the British government's budget deficit this year will surge to 400 billion pounds (550 billion US dollars). The British financial department must come up with a way to fill this huge gap without affecting the British economic recovery, so it has set its sights on e-commerce, the first bird to stand out in this epidemic.

The "excess profits tax", also known as the "windfall profits tax", was originally a tax intended to limit the market manipulation of monopoly giants. In the view of British politicians, it is completely necessary to provide assistance to physical stores after the epidemic, because these physical stores find it difficult to compete with online retailers during the epidemic, not to mention that the lockdown and sales bans during the epidemic have indeed harmed the interests of this group of people.

The Sunday Times said companies that could be subject to a one-off "excess profits tax" include online retailers such as Amazon and Asos Plc, food delivery companies such as Ocado Group Plc, Just Eat Takeaway and Deliveroo, parcel companies and large supermarkets. Senior British tax officials said in January that Chancellor of the Exchequer Rishi Sunak had been studying plans for an online sales tax as early as July last year, and that new VAT rules for online retailers would bring in an extra 300 million pounds ($411 million) in revenue.

People familiar with the matter told the media that the government is sticking to its election promise and will not raise payroll and sales taxes next month. There have been media reports that Sunak will extend vacation and other business support programs that were due to expire in April and announce a series of policies aimed at demonstrating the "benefits of Brexit."

E-commerce platform

Cross-border e-commerce market

Excess Profits Tax