Do we need an Amazon tax?

Barcelona is to become the first Spanish city to implement a so-called ‘Amazon tax,’ targeting online sellers such as e-commerce giant Amazon. The levy aims to tax these companies for using public space by delivery vehicles and to level the playing field for local small businesses.

From February 2023, all postal operators with an annual turnover of more than one million euros will be taxed and have to pay 1,25% of their gross revenues (bringing in an expected 2,6 mln euros). The tax will not be applied when deliveries are left at collection points rather than taken to the consumer’s door. 

‘We want local traders to have equal fiscal conditions compared to the major e-commerce platforms, who have a very high market share,’ Jaume Collboni, economy chief in Barcelona City council, said online daily El Diario. Is Jaume Collboni right.

Do we need an Amazon tax for local deliveries? Brick-and-mortar stores are still winning. European retail is gaining jobs, and e-commerce is contributing to that. Cities that are prosperous or growing have a successful retail sector. Retail vacancy rates are falling in Europe (to 4 to 5%). The e-commerce share of total retail sales is 6 percent in Spain.

Brick-and-mortar stores are still winning

Reports on the environmental impact of e-commerce are based on solid research. For example, a recent Oliver Wyman study (with the University of St Gallen) focuses on eight countries: France, Germany, Italy, the Netherlands, Poland, Spain, Sweden, and the United Kingdom. It is based on an analysis of official statistics and independent retailers’ surveys conducted in 2020.

The study found that retail is transformed across the eight focus countries at different speeds. The main changes are an evolution toward more organized retail, the growth of e-commerce, and a shift in household spending from goods to services. In southern European countries such as Italy and Spain, organized trade is less mature.

Are cities choking? Yes!

City centers and residential areas are flooded with diesel delivery vans. That is true. One in five vehicles in major cities is a van or truck. And more and more are coming. Of those vans, only 5 percent are for parcels for consumers. Most parcels are businesses-to-businesses, many from small local businesses (will they get taxed in Barcelona?).

The environmental impact of online purchases is positive. Offline shopping results in 1.5 to 2.9 times more greenhouse gas emissions than online shopping. Although e-commerce requires delivery vans, they reduce automobile traffic by a factor of four to nine. The industry is rapidly becoming more sustainable. There is no reason for ‘delivery shame’. More than 80 percent of the diesel-powered truck traffic in European cities belongs to companies mainly in small and medium-sized businesses in construction, hospitality, retail, offices, and waste collection.

Going car-free!

Indeed, the growing city logistics traffic no longer fits city’s car-free ambitions. Vehicles take up too much space, are unsafe, and are not good for our health. But: ‘be careful what you wish for!’ Soon, more European cities will announce a zero-emission zone, affecting millions of delivery vans; 60% of these vans belong to small businesses. Or, the municipality should stop the almost free parking waiver for small businesses that often need to be in town.

The proposal for taxing deliveries in Barcelona is a solid plan if you focus this plan on the large segments of city logistics. That would reward those businesses who drive into the city efficiently, with many shipments in one vehicle and with clean vehicles, and it would encourage entrepreneurs with their own transportation (and with only one or two shipments in the back of the car) to bundle, collaborate and outsource to city logistics professionals.

Fact-based or ideology-driven?

I hope the Amazon tax discussion is not about an ideology in which soon the people of Barcelona will only be allowed to buy from state-owned stores, of course, only on an allowance of coupons. Let’s make plans that will lead to less city logistics traffic in Barcelona and create a true level playing field for small businesses.

Walther Ploos van Amstel.

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