C.S.R? How about T.A.X?
Today some top honchos from Starbucks are up in front of MPs to explain how they organise their tax affairs. The papers have been full of articles recently about the minuscule amounts of tax some of these big companies pay – some of them pay no corporation tax whatsoever. Everybody from Vodafone and Amazon to U2 and Jimmy Carr have been accused of going way beyond what the man or woman in the street would think was fair.
I’m a businessman. I love business and I’m not averse to earning a profit, far from it. And I employ an accountant to make sure that I pay all the tax I should and not a penny more. So what’s the difference between me and, say, Starbucks?
Well, I’m playing by the rules and the spirit of the rules – my accountant takes my income, deducts legitimate/bog standard allowances and I pay tax on the rest. These corporations have made an art-form of shifting cash between parts of their businesses around the world simply to minimise that bill.
Of course Governments should legislate – by insisting on a minimum tax on turnover, banning corporate entities which have no trade other than tax ‘efficiency’ and/or placing punitive taxes on those that do. There’s an element of tragedy of the commons here – any one country that ‘gets tough’ on tax avoidance may lose out if others stand back – so an international agreement may be required, which in turn would take years of negotiation on past performance.
But what about the businesses themselves? Many of these companies claim to take Corporate Social Responsibility seriously. Well, paying tax is a moral and social issue – think of all those countries around the world which are struggling with huge deficits and who could ease their painful austerity programmes if companies operating on their turf paid fair taxes?
Is any captain of industry going to show moral leadership here? Maybe propose a code of conduct for others to sign up to? Anyone?