Amazon, Google, Starbucks get ‘green light’ on tax avoidance
NEWS PEG: Monday, 3 December 2012 – Publication of Public Accounts Committee findings on taxation of multinational companies, including Amazon, Google and Starbucks; and Chancellor’s autumn statement on Wednesday, 5 December 2012
A new report released today by War on Want reveals that the centrepiece of the government’s plans to tackle tax abuse will have no impact on the tax avoided by Amazon, Google and Starbucks.
The charge comes as the Public Accounts Committee publishes the findings of its inquiry following grilling of executives from the three companies, which saw stinging criticism of the “immorality” of the companies’ tax arrangements.
The report, Avoiding Avoidance, from tax justice campaigners War on Want, also shows that the government’s proposals, expected to be a highlight of the Chancellor’s autumn statement on Wednesday, would also fail to tackle recent tax avoidance scandals involving the Student Loans Company, the BBC and high ranking civil servants.
War on Want’s research shows the government rejected the opportunity to recover up to £5.5 billion a year via a General Anti-Avoidance Principle, instead opting only to target “artificial and abusive” tax avoidance through an anti-abuse rule.
Murray Worthy, the charity’s tax justice campaigner and the author of the report, said: “The government’s hypocrisy on tackling tax avoidance is breathtaking. Osborne and Cameron are happy to talk tough on tax. But, in reality, their plans will only go after the small fry on the fringes, while giving a green light to multinationals like Amazon, Google and Starbucks to continue avoiding billions in tax.
“This government’s tax plan is totally out of step with public opinion. While the public, MPs and businesses are sending a clear message that tax dodgers must be stopped from exploiting the system, the government would rather cosy up to its multinational friends. If tax avoidance is morally wrong, then failing to clamp down on tax avoidance is morally indefensible.”
The report argues that under the government’s proposed plans the types of tax avoidance undertaken by large multinational companies would now be considered responsible “tax planning”, while only a tiny minority of cases at the very fringes of what is legal would be covered by the new rule.
In his budget speech last March, Chancellor George Osborne branded tax avoidance “morally repugnant”, later speaking of his “shock” at rich individuals’ revenue dodges. In January, UK prime minister David Cameron said that Britain needed a tougher approach for large firms with “fancy corporate lawyers and the rest of it”.
War on Want is calling for a General Anti-Avoidance Principle aimed at tackling tax avoidance, raising revenue and increasing the equity of the tax system by reducing the opportunities for rich individuals and large corporations to reduce their tax contributions.
These findings are expected to add further pressure to the government to change its proposals in the wake of the Public Accounts Committee’s report, expected to be damning in its criticism of the government’s current approach to taxing multinational companies
- Murray Worthy is available for interview.
- War on Want’s report Avoiding Avoidance analyses the government’s proposals for a general anti-abuse rule, its application to recent high profile tax scandals and alternative options for the introduction of a General Anti-Avoidance Principle.
- Public Accounts Select Committee report on HM Revenue And Customs: Annual Report And Accounts 2011-12 is embargoed until 00.01 hrs GMT on Monday. See http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news/pac-announcement-on-report/
- Starbucks is expected to come under further pressure this weekend, as anti-cuts campaigners UK Uncut stage protests at Starbucks stores across the country http://www.ukuncut.org.uk/blog/call-out-8-dec-refuge-from-the-cuts
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