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Hey Corporations, It’s Time to Stop Avoiding Taxes

Hey Corporations, It’s Time to Stop Avoiding Taxes

Written by Murray Worthy, Senior Campaigner at War on Want.

Tax can do great things. Taxation can fund public services like healthcare and education and it can redistribute wealth to eliminate poverty and inequality. For any government anywhere in the world tax revenues are vital to meeting the basic needs of their citizens. Yet all too often for many of the world’s largest companies like Amazon, Google and Starbucks paying tax is little more than a choice.

The scale of this global scandal is truly staggering. It is now estimated that up to £20 trillion is now held in secrecy jurisdictions, better known as tax havens. Tax havens allow rich individuals to hide money from tax inspectors and allow multinational companies to shift their profits out of the countries where they make their money into tax havens where they can pay less tax. This wealth held in tax havens is more than the annual economic output of the UK and US economies combined. If that money were taxed instead it could generate twice the amount all rich countries spend on overseas aid or more than the UK spends on the NHS and education put together. It is hard to underestimate the positive impact this money could make.

Over the last few years, pressure from the public has forced tax avoidance from an obscure technical issue to the top of the government’s agenda. In the last year alone the Chancellor George Osborne described tax avoidance as “morally repugnant“ and Prime Minister David Cameron has said that “there are too many tax havens, too many places where people and businesses manage to avoid paying taxes,” pledging firm action this year as the UK takes up the presidency of the G8.

This recognition by the government of the need to act is a unique opportunity, with the potential to achieve real change to tackle companies’ abuse of tax laws around the world. Yet at the moment we risk falling far short. In the Budget in March, the government is set to introduce new rules aimed at tackling the abuse of the UK’s tax laws, the centrepiece of the government’s plans to tackle tax avoidance. Yet our research has shown that rather than tackling tax avoidance, it would have had little impact on the most high profile recent tax avoidance scandals including those involving Amazon, Starbucks, Google, Jimmy Carr or senior civil servants. These proposals also risk making things worse, by defining what is wrong so narrowly it could actually encourage more companies to avoid tax.

The UK is not only a victim of tax avoidance; it also plays a key role in the global system that allows big companies and rich individuals to avoid tax in countries all around the world through its global network of tax havens. UK-linked tax havens such as the Cayman Islands, Jersey, the British Virgin Islands and Bermuda rank as some of the most significant tax havens in the world, with devastating impacts on the abilities of countries around the world to raise taxes and fund public services.

Pressure from campaigners has opened up a unique opportunity to tackle tax avoidance and the tax havens that fuel them, yet it is only through people taking action that we can turn that opportunity into reality and make a real difference. We can ensure the government’s actions don’t fall short of what is needed.

Instead of introducing a weak and ineffective “anti-abuse” rule the government could instead introduce a General Anti-Avoidance Principle aimed at eliminating tax avoidance, giving tax inspectors strong powers to take on companies that exploit the UK’s tax laws. According to our research, this measure alone could recover £5.5 billion of the £25 billion lost to tax avoidance every year in the UK. The Prime Minister has said that action is needed to tackle tax havens, if this government is to play its part in that then it must take action to end the secrecy in the UK’s own tax havens and end their damaging impacts around the world.

Take action now and call on Chancellor of the Exchequer, George Osborne, to take action to stop the UK fuelling tax avoidance around the world, and instead ensure that all countries are better able to raise taxes to pay for vital public services and to tackle poverty and inequality.

 

War on Want is a movement of people committed to global justice. Our vision is a world free from poverty and oppression, based on social justice, equality and human rights for all.

Learn more at www.waronwant.org, or on Twitter and Facebook.

 

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126 comments

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10:01PM PDT on May 16, 2014

There is an argument that can be made for corporate capitalism if corporations participate as full members of society. However, where the rest of society exists to support corporations, we need something new.

8:46AM PDT on Sep 1, 2013

Why ask to take action only about the UK taxes? There's many more!!

1:36AM PDT on Apr 22, 2013

Thank you what a great article.

12:19PM PDT on Mar 30, 2013

ty

5:05PM PDT on Mar 29, 2013

should read " that these tax havens affect get together"

5:03PM PDT on Mar 29, 2013

Make a flat rate of tax. Say 10% of income for normal taxpayers and 20% for corporations with a basic amount of earnings before the tax kicks in. This to be charged on all money earned in the country that collects the tax. No exceptions, no write-offs, no moving money out of the country until that tax is paid. All records to be open to the tax-man. Huge fines to the companies that default or cheat, the amount of tax they cheated on by x 10 or x 100 to be paid to the country as soon as they are found out. Gaol for the chairman and the board of directors for non-compliance. If all the countries that these tax havens get together they can beat this.After all it is the normal tax payer that bears the burden of tax cheats

3:18PM PDT on Mar 29, 2013

OK

12:36PM PDT on Mar 29, 2013

Corporations are not people! A lot of corporations owe lots of back taxes and they've been using these loopholes they've created to try to own everything and do with it what they want, even at all living things peril. Even the water on this planet, the trees, mountains. This immoral, illegal behavior has to stop! It's time to remove these loopholes and make everyone pay their share.

6:28AM PDT on Mar 29, 2013

For all you Facebook "volunteers" (and I say volunteers because you give yourselves, your personal value, away for free - to him) out there - how do you feel about the fact that not only are you Zuckerberg's PRODUCT, but he's raking in beoucoup bucks in refunds from YOU because he borrowed some shady bookkeepers from GE? (recall last yr's returns?)

SCREW FB!! (and I pity the fools that put their personal stuff in there, as yet, another PRODUCT for Zucky to sell to the highest bidder)

3:50AM PDT on Mar 29, 2013

Thanks!

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