UK Prime Minister Boris Johnson To Discuss Amazon's Tax Record With Jeff Bezos During US Visit

by Bhaswati Guha Majumder - Sep 20, 2021 11:03 AM
UK Prime Minister Boris Johnson To Discuss Amazon's Tax Record With Jeff Bezos During US VisitBoris Johnson (left) and Jeff Bezos (right)
Snapshot
  • As per reports, even though sales climbed by £1.89 billion, Amazon's key UK-based division paid just £3.8 million more in corporation tax in 2020 than in 2019.

    UK PM Boris Johnson will reportedly discuss Amazon's tax records and also the climate crisis with Jeff Bezos on his visit to New York.

The United Kingdom Prime Minister Boris Johnson will reportedly question Jeff Bezos about Amazon's tax record in a face-to-face meeting that is expected to take place in New York on 20 September.

The meeting will be part of Johnson's three-day trip to the United States, where he will address the UN general assembly and will participate in discussions over several issues with the American president Joe Biden and Vice President Kamala Harris.

As reported by The Financial Times, British officials claimed that concerns related to international corporate tax rates for tech behemoths would be high on the table during Johnson's first trip outside the UK since the beginning of the coronavirus pandemic.

Amazon has been dogged by issues over whether it pays its fair share of taxes and the working conditions it provides to its employees. The Guardian reported that even though sales climbed by £1.89 billion, Amazon's key UK-based division paid just £3.8 million more in corporation tax in 2020 than in 2019.

According to accounts filed at British government agency Companies House, in the year to December 2020, Amazon UK Services contributed £18.3 million in corporate tax, up 26 per cent from £14.5 million the previous year. But its profits increased by a quarter to £128 million during the same period, while revenues increased by 64 per cent to £4.85 billion. As per the report, this helped to boost Amazon's overall revenues in the UK from retail, logistics and IT services to £20.63 billion in 2020.

However, Amazon, which was founded by Bezos, attempted to deflect suspicions of tax evasion by releasing a statement claiming that its operations in the UK as a whole paid out £492 million in "direct taxes" in 2020, up from £293 million the year before. Employer's national insurance, business rates, stamp duty and corporation tax are all included in this amount.

Additionally, Amazon said that as the business expanded its operations to meet strong demand during the Covid-19 pandemic, it invested £1.6 billion in the country. Eleven on-site solar power installations and a 350MW wind farm project off the coast of Scotland are among the investments.

According to the report, Amazon said in a statement: "We are proud of the significant economic contribution we are making to the United Kingdom's economy. Looking ahead, we know that the United Kingdom remains full of opportunity and we continue to be excited by the potential to continue to invest, create jobs, develop talent and have a positive impact in communities across the country."

But, the head of the Fair Tax Foundation campaign group, Paul Monaghan, described Amazon's estimates as "more smoke and mirrors" from the e-commerce giant, which continue to refuse to divulge just how much total profit they make in the UK and how much tax they pay on it.

He said: "Much of their UK income continues to be shunted to Luxembourg [through where Amazon reports its retail sales in the UK], where there is a 'loss-making' subsidiary that is not only not paying tax but is generating enormous tax reliefs that can be used in the future to ensure that little or no tax continues to be paid."

Monaghan, also added that the American company is expanding its global market dominance on the back of mainly untaxed income, allowing it to unfairly undercut local enterprises that follow a more responsible strategy.

However, as per The Guardian, when asked if Johnson would bring up Amazon's tax history with Bezos, who stepped down as CEO to become executive chairman of the company on 5 July, an official spokesperson answered said: "Yes, you can expect the Prime Minister to raise this important issue."

"We've been a leading advocate for an international solution to the tax challenges posed by the digitalisation of the economy. We secured an agreement at the G7 on digital tax, so we'll very much be looking to raise that," the spokesperson added.

As per Downing Street, the British PM will also discuss the climate crisis with Bezos, who believes that space exploration is part of the solution. In July, the billionaire said: "We need to take all heavy industry, all polluting industry and move it into space, and keep Earth as this beautiful gem of a planet that it is."

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