Tax efficent or breaking the law!
David Cameron has warned multinational companies avoiding tax in Britain that they risk being investigated after revealing that he was “not happy” with rules allowing them to avoid paying their way.
Margaret Hodge, chairman of the Public Accounts Committee, called on the Prime Minister to condemn the actions of companies such as Apple, Google, Facebook, eBay and Starbucks, claiming that they had collectively “avoided nearly £900 million of tax”.
A recent investigation indicated that Starbucks had managed legally to avoid paying tax on £1.2 billion of sales since 2009. The committee is due to question Revenue and Customs officials about the case.
Governments complain when they receive what they believe to be insufficient tax. But they have a duty to write the rules sensibly so this doesn’t happen. The rules are too complex and taxes are too high. Of course companies try to avoid them and run tax efficiently as they have a duty to their share holders. Governments also have a duty to spend the tax they raise wisely and not just waste it. The current system doesn’t work worldwide.
American companies have 1.7 trillion that they have made abroad but can’t bring home to the US because of tax. Simplify the system and build a fairer system.