The managing director of John Lewis has called on the Government to look at the way foreign multinational companies pay tax in the UK.
Andy Street said companies in overseas tax havens will "out-invest and ultimately out-trade" businesses paying full taxes in the UK. He called on the Treasury to look into the "principle" that underpins where earnings are taxed - suggesting that UK companies are not competing on a level playing field.
It comes two days after bosses from Starbucks, Google and Amazon were subjected to a three-hour grilling by MPs over how they manage to pay little or no corporation tax on their UK operations. All denied that they were engaged in aggressive tax avoidance and were met with derision from members of the Public Accounts Select Committee.
Mr Street, who made his comments in an interview with Jeff Randall on Sky News, said overseas companies will effectively be able to invest more in the long run thanks to low tax bills.
He said: "You have got less money to invest if you're giving 27% of your profits to the Exchequer than, clearly, if you're domiciled in a tax haven and you've got much more. So they will out-invest and ultimately out-trade us and that means there will not be the tax base in the UK. So I do think it's an issue that needs to be examined."
Mr Street said that the issue was wider than any rivalry between Amazon, the online retailer who faced questions about tax avoidance from MPs on Monday, and John Lewis. He said: "Our customers expect around a fair and level playing field and I suspect our customers do think both companies should be treated in the same way."
Mr Street also argued that the Treasury should look into the "whole question" of whether earnings from a particular country were taxed in that same country.
Jonathan Isaby, political director of the TaxPayers' Alliance, echoed the call for the Government to investigate the current tax system. Also speaking to Jeff Randall, he said he "understood the public anger" over the issue.
He added: "But what we have to remember is that they are operating within rules and legislation, set by a succession of governments of all colours, that have provided loopholes in a tax code which is thousands of pages long, incredibly complex and burdensome.
"What the call from Andy Street tonight for an investigation should mean, is that the Government should not only be looking at multinationals and how they pay tax but how all businesses pay tax in this country."