I note that UBS, that bastion of tax compliance,last week predicted a:
gradual erosion of governments’ ability to tax.
This must get them very excited, but the comment was made in response to the supposed exodus of companies from the UK.
As Amit Kara, a director of UBS, apparently said:
This is the kind of tax competition we should expect. The pressure will remain on countries such as the UK to continue lowering corporation tax especially for the fleet-footed. The tax burden may shift to smaller companies.
What amazes me in the UK context is this. Tescos has paid tax at an average of 22.4%. The trend is downward, of course. It was in the teens last year. The SME tax rate is heading for 22% in the UK, and effective tax rates on SMEs are often much higher.
Now answer me this:
1) Why is the CBI happy about this?
2) Why are the British Chamber of Commerce happy about this?
3) Why are the IoD happy about this?
4) Which party is going to turn round and say that this is wrong: we are taxing the wrong enterprises?
Incidentally, TJN has been saying this for a long time. See page 4 here, for example.
Tax justice favours small business. I’d politely suggest none of these organisations seem to.