Amazon had $5bn (£3.8bn) wiped off its stock market valuation yesterday (16th August) after the US president Donald Trump hit out at the e-commerce giant for doing “great damage to tax paying retailers” in a tweet.
Trump’s post on the social media site said that “towns, cities and states throughout the U.S. are being hurt - many jobs being lost!”
After he sent the tweet at 6.12am EST, Amazon’s stock plunged. On Tuesday it had closed at $982.74 a share, but fell to a low of $974.27 after Trump’s tweet, amounting to a loss of $5.7 billion.
Amazon has been criticised for its low tax payments in both the US and the UK, despite its very high sales.
Last week, the UK Booksellers Association’s head of corporate affairs, Giles Clifton, called for tax system to be overhauled after it emerged that Amazon UK Services corporation tax bill halved last year despite its sales soaring past £1bn for the first time. Results filed on Companies House last week revealed turnover at Amazon's UK Services arm hit £1.5bn in 2016, but its corporation tax payments halved to £7.4m. Corporation tax is paid on profits not revenue and Amazon’s operating profit tumbled by over 50% in 2016 to £25.6m after it heavily invested in its warehouses and distribution network throughout last year.
At the time, Clifton said: “…The current system of taxation is out of date and discredited,” Clifton said. “It is simply wrong that the current system is so heavily weighted against bricks and mortar retailers, who are paying £2.41 in business rates for every £1 paid in corporation tax.”
Amazon has recently begun opening brick and mortar bookstores in the US, with its most recent in New York.
However, its founder Jeff Bezos also owns the Washington Post newspaper in America, which has published a number of damaging stories about the president since he took office, reported The Guardian.
Amazon says it pays all taxes it is required to in the UK and every country where it operates. “Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly-competitive, low margin business and our continued heavy investment," the company says.
Amazon announced yesterday that it plans to open a warehouse in Bristol next year, creating 1,000 new jobs and bringing its total UK employment to 24,000.