Amazon Web Services, the US computing arm of the E-commerce giant is working with the Scottish Government on the new Protect Scotland app, launched last week. But tax campaigners have slammed the Scottish Government/NHS Scotland for giving the ten-year public contract to the web giant.
Designed by software developers NearForm for NHS Scotland, the app uses the same technology as the Irish and Northern Irish proximity tracing apps.
The smartphone app can alert users if they have been in close contact with someone who has tested positive for Covid-19 and advises them to self-isolate and get tested.
First Minister Nicola Sturgeon said the voluntary app will “complement existing contact tracing methods” and could potentially help to avoid local lockdowns.
So far, more than 800,000 people have downloaded the app which does not store details on an individual or their location but uses encrypted, anonymised codes exchanged between smartphones to determine close contacts with people who test positive.
Paul Monaghan, chief executive of Fair Tax Mark, said: “Amazon refuses to say how much income and profit it makes in the UK and the taxes it pays on this.
“But we know from their US report and accounts that the web services arm is extremely lucrative and makes up more than half of all profits worldwide.
“Questions need to be asked as to whether Scotland is getting value for money.”
Scottish Labour leader Richard Leonard MSP told Express.co.uk: “No company should be awarded public contracts unless they meet the Fair Tax Mark and treat their workers properly.
The online retail giant said it contributed £1.147 billion in total tax from its UK operations last year, although the majority of this was from indirect taxes.
Amazon said employer taxes such as national insurance contributions made up the biggest proportion of the £293 million it paid directly to the tax authorities.
It said business rates were the next largest part of its tax payment last year, followed by corporation tax and other taxes such as stamp duty land tax.
The direct tax payment represents a 33.2 percent increase after paying £220 million in direct taxes in 2018.
However, this was despite logging revenues of £13.73bn in the 2019/20 tax year, a 26 percent increase in profits.
Amazon and other tech giants have faced scrutiny over how much tax they pay in the UK, prompting the government to launch a digital sales tax in April.
Amazon said in a statement this week that it pays “all taxes required in the UK” and added: “We are investing heavily in creating jobs and infrastructure across the UK – more than £23bn since 2010.
“We pay all taxes required in the UK and every country where we operate.
“Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly-competitive, low margin business and we continue to invest heavily.”
In response to the concerns, an NHS Education for Scotland spokesman said: “The contract was a full Official Journal of European Union process and was won by AWS after a rigorous evaluation process in competition with other companies.”
A Scottish Government spokesperson, added: “We strongly agree that all companies should pay their fair share of taxes – but corporation tax is not something the Scottish Government has control of and is the responsibility of the UK Government.”
An Amazon Web Services spokesperson, said: “Government departments using AWS are not only enjoying cost saving of up to 60 percent but also supporting a vast ecosystem of smaller companies, across the UK, that offer products and services that complement and help customers take full advantage of AWS.
“Public sector organisations in the UK use the UK branch of AWS Europe which registers its sales in the UK and pays all applicable taxes, due on its profits, directly to HMRC.
“Amazon recognises that its status as a supplier to the public sector is a privilege which has to continually be re-earned through the quality of our services and the value for money that we bring for UK taxpayers.
“We know they will only remain customers for as long as we are able to deliver on both of those things.”