Labour vows to ensure the likes of Amazon pay their fair share of tax or face losing lucrative public sector deals.
Shadow Chancellor John McDonnell told the Mirror a Labour government “will not give public sector contracts to tax avoiders, full stop.
“What they have done is use every device not to pay their way.”
Asked if Labour would scrap Amazon’s contracts, he said: “We would have to look at the legislation.
“We would do whatever it takes to make sure that companies like Amazon pay their fair share of tax.”
The web giant and its “cloud computing” arm Amazon Web Services has received 39 taxpayer-funded contracts in the past four years alone, worth £460million, according to GMB union research.
Among the deals are £47million from HMRC, £11million from the Home Office, £7million from the Ministry of Justice, and £5million from the Education Department.
After fierce criticism, Amazon recently disclosed it paid £793million in tax last year on its UK operation, which had a £10.9billion turnover.
Alex Cobham, of the Tax Justice Network, said of Amazon: “It’s almost unfathomable that governments pay public money to this deeply anti-social company, without demanding at least basic transparency about tax.”
An Amazon spokesman said: “Amazon pays all the taxes required in every country where we operate.
“Corporate tax is based on profits, not revenues, and our profits have remained low given our heavy investments. Retail is a highly competitive business.”
Deals loss risk would focus mind of Goliath
Over 20 years or so Amazon has turned itself from an online book store into a £700billion Goliath.
There’s no doubting its power or popularity, with its vast product range and superfast deliveries.
It has a global army of dedicated fans.
But its tax affairs have dogged the firm, leading to repeated promises by politicians to clamp down on the tech giants.
But unless there is a concerted push to change the world’s tax rules, little will change.
Yet Labour’s vow will hit them where it hurts, as governments have huge power over what they spend with firms.
This influence can be made to make boardrooms sit up.
Yes, Amazon has taken the first steps toward being more open about tax but it has a long way to go. The risk of losing government deals will focus its mind.