Ending UK Digital Services Tax would increase need for business rates reform, says Kingfisher boss

LONDON (Reuters) - Ending Britain's Digital Services Tax levied on large tech companies such as Google and Amazon would disadvantage traditional retailers, exacerbating the need for business rates reform, the boss of home improvement retailer Kingfisher said.

Britain introduced its Digital Services Tax in 2020, levied at 2% of the gross revenue large digital companies derived from users in the country.

Reports have suggested that finance minister Rachel Reeves may use her Spring Statement budget update speech on Wednesday to reduce or even abolish the tax to win favour with the Trump administration in the United States.

Thierry Garnier, CEO of Kingfisher, which owns the B&Q and Screwfix chains in the UK, indicated such a move would be unwelcome.

"I really do hope that we see a proper reform on business rates, that's all the more necessary if you believe some of our American competitors will pay less tax," he told reporters on Tuesday after Kingfisher published annual results.

"We (retailers) are as well, all of us, tech companies who are investing on data, on AI, on automation and we need as well the government support to be innovative and to employ more people in this country," he said.

Garnier noted that under current government proposals on business rates, Kingfisher would end up paying more.

Predominantly bricks-and-mortar retailers have for years complained that business rates - a property tax charged on most commercial properties to fund local services - are archaic and hand an unfair cost advantage to online retailers such as Amazon.

(Reporting by James Davey; Editing by Mark Potter)