Economy

Digital tax: trade association criticizes the Greens boss’s proposal

Closed shops in the city centers, like here in Essen, make online trading flourish even more

Closed shops in the city centers, like here in Essen, make online trading flourish even more

picture alliance / Rupert Oberhäuser | Rupert Oberhäuser

At the end of last year, there were calls for help from the retail sector. The German Trade Association (HDE) warned that numerous stores would not survive the lockdown if there were no appropriate state aid.

But in addition to the state corona rules, there was another danger for the retail business: competition from the major online retailers. It was not until December 2020 that a study by the Institute of German Economy (IW) revealed that significantly fewer people went shopping in the city centers. In November the frequency fell by 44 percent, in December even by 49 percent. Big winner, however: Amazon. Even before Corona, the digital marketplace was responsible for 48 percent of online sales in Germany.

Green boss Robert Habeck now wants to counter this development with a digital tax for large online retailers, he urged the German press agency (dpa). But the German trade association considers this approach to be wrong.

Online retailers are to help finance roads and broadband Internet

Habeck told the German Press Agency that local shops were closing in favor of pandemic protection and that inner cities were threatened with extinction. The big online retailers, on the other hand, did the business of the century. But they paid much less tax than the bookstore around the corner. Amazon, Google and Co. used infrastructure such as broadband Internet and roads, but hardly participated in the financing, criticized the Greens chairman. His solution: the introduction of a digital tax for the large online retailers, from which the public infrastructure also benefits.

The German government, especially finance minister and SPD chancellor candidate Olaf Scholz, accused the Green leader of not acting consistently. “Of course, the best would be global taxation of digital companies, second best a European one,” he said. “But if even that doesn’t work, then you have to go ahead together with the partners who want to.”

A digital tax could also hit smaller retailers online

The HDE, on the other hand, is critical of Habeck’s proposal: “Playing off the two sales channels online and in-store is not enough and does not correspond to the reality of most companies,” a spokesman told NewsABC.net. Because many stationary retailers have long since established their own online channels. In plain language this means: Habeck’s proposal for a digital tax would also affect retailers who sell online.

The economic policy spokesman for the FDP, Reinhard Houben, also sees this problem. From a purely legal point of view, it is not even possible to introduce a digital tax only for Amazon, Google and Co., he says. It would hit all retailers in the online space. “We can’t just encourage stationary retailers to sell digitally and now introduce a tax on them,” says Houben. That is paradoxical. “Mr. Habeck’s idea sounds charming, but he shoots from the hip and doesn’t even know who he’ll hit with it.”

In addition, the spokesman for the HDE fears that the digital tax could hit the retail sector in a sensitive way: The example of the French digital tax would have shown that the increased tax rate was mainly passed on to small and medium-sized businesses that trade via online platforms drifted, says the spokesman.

The industry association therefore sees the need for political action in a completely different place: As before, 60 percent are not yet represented online, especially in small and medium-sized retailers. “The federal government has to help, especially in the current crisis,” says the spokesman. And further: “We need a digitization fund of 100 million euros so that these companies do not lose touch through no fault of their own”.

A community aid program aims to help retailers go digital

A possible approach for this could now be provided by the proposal by Federal Economics Minister Peter Altmaier (CDU). He wants to support the trade and the municipalities with an aid program to enable “attractive, contemporary retail in the city center”. On the one hand, businesses should participate more in digitization, and on the other hand, it is about dovetailing the economy more closely with culture. That will also mean bringing interesting offers beyond shopping into the inner cities.

FDP economics spokesman Houben also believes that local politics could make a difference: It shouldn’t be about burdening online retail in general, but rather making stationary retail outlets more attractive. “If we want to keep local retail, it has to be fun to go,” he says. This included longer opening times, more parking options, but also easier access.

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