The Great Debate UK
from Nicholas Wapshott:
There is nothing more likely to spark anger than an unfair tax regime. The American Revolution was founded on it. So the discovery that some of the largest and most successful companies in the world -- among them Google, Apple, Amazon and Starbucks -- have legally minimized the tax they pay, sometimes to as low as zero, in many nations in which they earn the lion’s share of their revenue is causing considerable irritation.
The result was evident at the G8 meeting in Northern Ireland, where Britain’s conservative government, chairing the conference of the world’s richest nations, put making corporation tax fairer at the top of its agenda, after the civil war in Syria. David Cameron, who like most conservatives believes in low taxes, is in a bind.
In an attempt to reduce public borrowing he is imposing high personal taxation on the Brits -- lifting “value added” consumption tax to a record 20 percent -- but finds that many of the most profitable companies operating in Britain are dodging taxes altogether. He thinks it is unfair. And so do his voters. He is under intense pressure to deliver a solution or he can expect to be turfed out of Downing Street.
At Davos this year he signaled his intention of doing something about it. “Companies need to wake up and smell the coffee,” he said, “because the customers who buy from them have had enough.” “In a world where some companies navigate their way around legitimate tax systems -- and even low tax rates -- with an army of clever accountants,” he said, “some forms of avoidance have become so aggressive that I think it’s time to call for more responsibility and for governments to act accordingly.”
from The Great Debate:
-- Alexander Smith is a Reuters columnist. The opinions expressed are his own --
Some predict that the financial crisis spells the end for London as a major global financial centre, arguing it has thrived on lax regulation and a quasi-tax haven status and that the regulatory backlash which inevitably follows such a catastrophic economic debacle will suffocate the innovation and the financial incentives which have driven the growth of services in the British capital.
from The Great Debate:
Big countries have got the world's tax havens running scared. They must now press home their advantage to stop such countries providing oases for tax dodgers and money launderers.
Switzerland, Austria, Luxembourg, Liechtenstein and Andorra have all responded to a global crackdown on tax evasion by offering to relax strict bank secrecy laws. This is an important victory for campaigners to put tax havens on the straight and narrow. Until their recent climbdown, Liechtenstein and Andorra were two-thirds of a trio of hardliners that refused to commit to Organization for Economic Co-operation and Development (OECD) standards on transparency and the exchange of information, earning them a place alongside Monaco on the OECD's blacklist of uncooperative tax havens.