{"id":24333,"date":"2014-03-10T08:08:11","date_gmt":"2014-03-10T08:08:11","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=24333"},"modified":"2014-03-10T08:08:11","modified_gmt":"2014-03-10T08:08:11","slug":"the-reason-why-big-businesses-arent-taxed-properly-is-that-the-will-to-do-it-does-not-exist","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2014\/03\/10\/the-reason-why-big-businesses-arent-taxed-properly-is-that-the-will-to-do-it-does-not-exist\/","title":{"rendered":"The reason why big businesses aren’t taxed properly is that the will to do it does not exist"},"content":{"rendered":"

There is a fascinating article <\/a>on\u00a0country-by-country reporting and the\u00a0Base Erosion and Profits Shifting process in this morning's Tax Analysts (behind a paywall). There is much I could comment on but one paragraph jumped out, which said:<\/p>\n

At a recent conference in Washington, Mike Williams, director, business international tax at HM Treasury, said he is \"worried about the cost\" to HM Revenue & Customs of receiving all this information [i.e. the data on country-by-country reporting]\u00a0and transmitting it. The information requested by the templates will be useful to tax administrations only if they have the systems, tools, and personnel to wade through and derive meaning from large quantities of data, and most government budgets won't allow for a revamp to properly evaluate that data.<\/p><\/blockquote>\n

That's a very \u00a0significant claim. \u00a0What Williams is saying is that \u00a0the information to ensure that large companies do pay the right amount of tax, in the right place and at the right time could exist if country-by-country reporting data was supplied to authorities like his own, but that governments have no inclination to use that information to ensure that this right amount of tax is paid.<\/p>\n

I readily admit that I'm not wholly objective on this issue: \u00a0as the creator of country-by-country \u00a0reporting of course I have a bias towards it, \u00a0but what we are seeing \u00a0in this comment is something that I have long suspected. \u00a0 What it says is that the\u00a0in-principle opposition to \u00a0country-by-country reporting does not only come from \u00a0within the business community, it also comes from within government. What \u00a0Williams is \u00a0saying \u00a0is that CbC \u00a0could increase government revenue, but that the government is not willing to use the information to raise that revenue, even though very obviously it would be cost-effective to do so. \u00a0The objection he raises to \u00a0country-by-country reporting is not then practical, \u00a0but is instead ideological.<\/p>\n

This is of course the ideology of neoliberalism. \u00a0It is however a very perverted logic. \u00a0What Williams is saying is that country-by-country reporting \u00a0would undermine \u00a0the supposed ability of multinational corporations to compete through the use of tax abuse, tax havens, secrecy, tax avoidance and tax arbitrage\u00a0 and that the UK government does not believe that, for these corporations at least, restricting their ability to undertake such activity is appropriate.<\/p>\n

Williams is, of course, wholly wrong. \u00a0First of all the whole purpose of the\u00a0Base Erosion and Profits Shifting \u00a0project, to which David Cameron supposedly so enthusiastically signed up, \u00a0is to prevent the sort of tax abuse \u00a0which country-by-country reporting should restrict through disclosure of its existence. \u00a0To now oppose CbC \u00a0or to refuse to use the data it supplies \u00a0simply reveals hypocrisy in David Cameron's position. \u00a0I would not have thought it was Williams' \u00a0job to do that, \u00a0but if it is then it is clear that such hypocrisy does exist.<\/p>\n

Secondly, \u00a0the whole logic of this opposition is wrong. \u00a0The\u00a0ability of multinational corporations to compete through the use of tax abuse, tax havens, secrecy, tax avoidance and tax arbitrage \u00a0is, of course, entirely anti-competitive. \u00a0Such a process of abuse may, of course, let these companies maximise their profits at expense to others, but in the process it also fundamentally undermines the level playing field on which all business should compete if markets are to provide the benefit to society that is it is claimed \u00a0they can deliver. \u00a0That is because this abuse undermines nationally-based companies \u00a0and smaller companies, \u00a0both of which groups do\u00a0not have the advantage that multinational companies \u00a0enjoy, with the tacit support of HMRC and the UK government, \u00a0to undertake international \u00a0tax avoidance and profit shifting.<\/p>\n

This though, in itself reveals something else which is also of significance and which many in the UK business community should note, with care. \u00a0What the UK government is, effectively saying, through Williams' words, \u00a0is that it does not believe in fair competition. \u00a0What it believes in is supporting the winners, and the winners as far as it is concerned are those who are already at the top. \u00a0What it is, then, willing to do, \u00a0is to stack the odds in favour of those already \u00a0in advantageous positions. \u00a0The result, is, of course, an increase in inequality in society at large, and within the business community. Both \u00a0cost us dear.<\/p>\n

This is why I welcome political commitments to \u00a0corporate transparency<\/a>. Such \u00a0transparency and the willingness to use the resulting data for the good of all in society is vital if we are to \u00a0create a country in which everyone can prosper, including businesses of all sizes, \u00a0which is something I firmly believe in.<\/p>\n","protected":false},"excerpt":{"rendered":"

There is a fascinating article on\u00a0country-by-country reporting and the\u00a0Base Erosion and Profits Shifting process in this morning’s Tax Analysts (behind a paywall). There is much
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[79],"tags":[],"class_list":["post-24333","post","type-post","status-publish","format-standard","hentry","category-country-by-country"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/24333","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=24333"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/24333\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=24333"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=24333"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=24333"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}