Fighting to provide better lives to the world’s poorest should be our joint aim in the 21st century.
It’s disgusting to see the massive impact that not having basic services like clean water and basic healthcare can have on the world’s poorest people.
Are you wondering what is the relationship between helping the world’s poorest people and corporate tax avoidance?
The developing countries need tax revenue so they have the funds to provide the training for basic healthcare professionals and educators and provide clean water to the places where it matters.
Corporate income tax makes up 8 percent of government revenue in wealthy countries – but the figure is double that in poor countries.
This is why campaigns to tackle unfairness in the global tax system are so vital.
Corporate tax avoidance continues on a massive scale. This prevents developing countries having the necessary funds for survival.
In fact, some $100 billion every single year is swiped from developing countries by sneaky global companies.
That figure is enough hundreds of millions of the world’s poorest children.
And also provide healthcare that could save the lives of five or six million children every year.
A report I read recently, detailed a British multinational called RB (formerly Reckitt Benckiser). They manufacture products like Durex and Dettol.
The reports suggested that RB avoided £200 million in tax globally in the last few years.
This included approx. $100m from developing markets.
Obviously, many developing markets have populations below the poverty line where tax revenue is vital so they can provide public services including clean water and life-saving healthcare.
RB issued a statement calling for tougher tax laws and greater transparency – urging “governments to take the necessary steps to accelerate public country-by-country reporting” and for the UK to play a leading role.
These tougher requirements for financial reporting would mean that companies have to publish details about how much business they do and how much tax they pay wherever they operate.
Wouldn’t that be a refreshing change?
Anyone who has a small business in the UK knows they have to send detailed financial reports in every year.
If one of us is just a few weeks late, we are fined heavily. As I found out just a few months ago.
When I sent a letter pleading for some clemency, I was told to take a long walk off a short plank – and “Pay up ASAP or Face Late Fine Payment Charges!!”
But it’s the same as everything right?
The little man always has to pay!!
Greater transparency and scrutiny would help to prevent companies from avoiding paying their fair share in countries, both rich and poor.
But will our governments ever stand up to the likes of Amazon, Starbucks and Google??
I very much doubt it.
Of course, we’d all welcome any significant move from our governments to chase down any of these massive corporations who try their best to avoid tax at any chance they can get.
But I would urge any company that knows they are cheating us all, and voluntarily reveal what business they do and what taxes they pay in every country in which they operate.
There might be some light at the end of a very long tunnel.
Some companies might be beginning to open their books.
Unilever explains its tax strategy in depth and reports the amount of corporate tax it pays in each region and the largest countries where it operates
Also, Vodafone describes its business by location, including what profits they have and what taxes they paid.
Energy company SSE is starting to report openly and is supporting tougher transparency laws.
Credit should be given to these companies.
But, before we sit back and think the fight is over…
Thousands of companies are still hiding.
I haven’t seen or heard of Amazon, Starbucks, Facebook and Google of coming anywhere near clean.
And in the case of Starbucks and Amazon, that means so many British small businesses are at a disadvantage, and can no way compete with them if they are not paying their taxes fairly.
Frankly, any company which voluntarily improves their tax practices is great – but it does not mean it’s a substitute for government regulation.
We should push governments for stronger rules to require companies to reveal their tax practices. Right now these are largely invisible to many who have legitimate reasons to scrutinise them — from campaigners to investors to poorer countries’ revenue authorities.
In the UK, the HMRC spends a ton of time and money chasing us small boys. So when will they chase down the huge multinationals?
Poor countries don’t have the resources to engage in long legal battles, and aren’t always included in information-exchange agreements with other governments.
Right now, it seems that momentum for greater corporate tax transparency is growing. It’s a question of “when” not “if.”
And the world’s poorest people need it sooner rather than later.
EU legislation is moving forward. The UK government passed legislation enabling it to introduce public country-by-country reporting.
Country-by-country reporting is supported by a UN-supported group representing 1,380 investors managing $59 trillion, as well as a Norwegian investment group that manages the world’s largest sovereign wealth fund.
In Britain, corporate tax avoidance is the public’s top concern about business behaviour and corporations are concerned that it is contributing to a lack of trust in business.
Most people in the UK think that companies should publish what tax they pay in every country they operate and want the government to tackle tax avoidance.
So please don’t waste any more time.
Please think about where you spend your hard earned money. And support British businesses that pay all their taxes fairly.
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