June 25, 2013 / 12:21 PM / 5 years ago

UK consumers, not govt, can drive tax change - Sainsbury boss

LONDON, June 25 (Reuters) - Britain’s consumers, rather than its politicians, are more likely to bring about change in the country’s taxation regime, the boss of its third-largest grocer J Sainsbury said on Tuesday.

Several companies, including Google and coffee chain Starbucks have faced criticism from UK tax campaigners over the way they structure their tax affairs, provoking consumer anger and pledges from political leaders to act.

Last week, leaders of the world’s eight richest economies said they would take a tougher stance on tax evasion but promised little in the way of specific new action at the end of a two-day summit in Northern Ireland.

“It’s much more likely that consumer action will change corporations’ attitude than government action because it will be so difficult to move the dial across international borders,” Justin King, chief executive of Sainsbury‘s, told delegates at the British Retail Consortium’s (BRC) Retail Symposium 2013.

He said if consumers changed where they shopped tomorrow, corporations would quickly change their attitude to tax.

“The things that bring about most corporations’ Damascene conversions is realising that actually it’s hurting them in their core franchise,” he said.

King said the tax debate in Britain had shifted to two distinct issues.

Firstly there was the “moral issue” of some companies arranging their tax affairs so they do not pay their way but still expect to benefit from what the tax system pays for, such as education, health and roads.

Secondly there was the debate about the unfairness of tax becoming part of the competitive dynamic, with internet players having an advantage over traditional retailers.

“As our industry is changing away from a property-intensive industry to one in which property plays a part but a much lesser part than it has historically, our tax system, that raises local taxes primarily on property, is exposed as an historical anachronism,” said King.

“It clearly has to change and is a legitmate debate for us and the BRC to be driving.”

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