AMAZON has been confirmed last night to avoid new digital services levy.
However, the online marketplace of small traders is affected.
In April, the tax has been announced so that major companies that have profitable enterprises in the UK pay their share in public services in the country.
Amazon, which last year earned a British bill of £293 million in revenue of £13.73billion, does not, according to The Times, have to pay the tax on goods that it sells.
The only profits earned from third-party vendors who pay to use its marketplace website would be charged by the company.
This costs will be shifted in higher payments, the retail giant reported.
This implies in reality that they are not responsible for the fee and therefore gain comparative advantage over smaller retailers that use their site.
Conservative Hurley’s pair Lord Leigh said to the Lords: “I find this utterly scandalous.
“It is clear that the UK government does not adequately tax Amazon and allows it to stop a marketplace tax on its own revenues.”
Digital tax represents the inability in many jurisdictions to achieve an international agreement on taxation of technology firms.
Two-per-cent tax on sales originating from British consumers must be charged by internet companies, for example search engines , social media sites and the retail industry.
However, the government has refused to tax sales due to worries that this may have detrimental implications for conventional retailers like John Lewis, who have on-line sales channels.
This has prevented that Amazon pays the goods tax directly it sells.