The Scottish Retail Consortium has warned that an increase in business rates is squeezing already hard-pressed retailers and could lead to a further drop in employment in the sector.
Director David Lonsdale said increases to business rates on Friday were unhelpful if Scotland’s retail sector was to be revitalised.
One in 11 shop units in Scottish town centres lie empty and there are 3,500 fewer employed in the retail sector now than there were 12 months ago.
Mr Lonsdale said raising rates when the industry was going through significant change came at the risk of derailing future growth.
“A thriving retail industry is a great route to better paid jobs, more commercial investment, a stronger indigenous supply chain and additional tax revenues,” he said.
“The industry is undergoing significant transition and retailers are seeking to respond positively with substantial investment in new technology, a more skilled workforce and better logistics.
“However, this is made all the harder by the rising cumulative burden of Government-imposed costs which is an acute problem and is holding back investment.
“Increases in business rates have been wholly out of step with the other main local property tax, with rates tied to an escalator whilst council tax has been frozen.
“Retailers stump up a quarter of all rates paid and this is ratcheted up year after year with little or no regard to trading or economic conditions.
“The retail industry is facing profound change and other routes to market, notably online, are increasingly more attractive and far less costly than maintaining a bricks and mortar presence of shops.
“This places a question mark over likely future tax revenues from business rates.”
Analysis by the SRC shows that in 2007-08 business rates and council tax produced similar amounts in revenue at £1.8 billion.
By contrast, 2014-15 saw businesses pay out £628 million more than was raised through domestic charging.
Mr Lonsdale called on Scotland’s political parties to commit to business rate reform, including looking at the supplemental charge on larger retails which is due to double this week.
The SRC said the increase would add a further £60m tax burden on Scotland’s largest retailers.
“We’ve yet to hear a convincing explanation as to why firms operating from medium and larger sized premises in Scotland are better placed to be forking out more in rates than firms in comparable premises elsewhere in the UK,” Mr Lonsdale said.
“Our fear is that this Scotland-only surcharge could open the door to even higher business taxes in future if there is a shortfall in devolved tax revenues.”