CBI joins criticism of Scottish business rates levy
THE county’s biggest business organisation has joined calls for the Scottish Government to abandon plans for a so-called ‘Amazon tax’.
The CBI said plans to let councils levy a new charge on out-of-town stores and online retailer warehouses, such as those of Amazon, would deter investment and damage the economy.
The organisation, whose members employ 500,000 Scots, also said the levy would not work as a “unilateral” measure in the global drive to tax the digital economy more effectively.
The out-of-town supplement, which is due to be piloted from 2020, is part of a suite of reforms to the business rates system instigated by last year’s Barclay Review.
The CBI welcomed a series of other measures in the Barclay Review, including more reliefs for new businesses, three-year revaluations, and greater transparency.
However it was scathing about the out-of-town levy, which the Barclay Review said should be "modest", set by individual councils and used to help support struggling town centres.
The Scottish Retail Consortium has also strongly criticised the idea.
Calling for the plan to be abandoned, the CBI said the extra charge would hit a cross section of employers, such as garden centres, supermarkets and car dealerships, many of them already paying a separate supplement linked to their large size.
In a submission to the Scottish Government’s consultation on the out-of-town charge, the CBI said: “The issue of taxation in the new digital economy is being debated across the world’s developed economies with the OECD , the EU and the UK government attempting to find multilateral and unilateral solutions for how to tax global online business.
“The Scottish government will not be able to unilaterally address such complex issues by giving local councils the ability to impose an additional levy.
“What an additional levy would do is hit a range of local businesses across Scotland that are doing their best to contribute to their local economies.”
It said if ministers went ahead with the plan, there should be a range of safeguards including a “statutory cap”, clarity on how the money would be spent, and consultation with business.
CBI Scotland director Tracy Black said: “Business rates have been a bone of contention for far too long. While the Scottish Government should be applauded for taking action to remedy the situation, there’s still some way to go to build a regime that fits the Barclay Review’s goal of supporting business growth and long-term investment.
“While we’re very sympathetic to the plight of high streets up and down the country, clobbering vital employers with a triple tax whammy is not the solution – instead we need smart, creative and sustainable proposals that revive local communities through increased economic activity. The idea for an out-of-town levy is a non-starter and the proposal should be scrapped immediately.”
The Scottish Retail Consortium has called the out-of-town surcharge “ill-considered and poorly timed”, and would add to the complexity of an already complicated system.
The Chartered Institute of Taxation said the levy should help the rates regime better reflect local priorities but was likely to be a “bureaucratic burden” for already stretched councils.
A Government spokesperson said: “As part of the consultation we launched in June, we are now seeking views on allowing up to three local councils to introduce pilot schemes in which businesses based predominantly online or out-of-town might be charged a modest business rates supplement.
“The proceeds from this supplement would be used to support rates relief for businesses in town centres and we are consulting on a range of appropriate safeguards, such as the need for consultation with all rate-payers who might potentially be affected.
“It is important that the consultation is as wide-ranging as possible and we would encourage all those with concerns or comments about the current business rates system to take part.”