Tax avoidance – G8 will protect corporate power

G8 political leaders claim that controlling widespread tax avoidance by multinational corporations will form a key part of their next meeting. This will be qualified by saying that regulation requires international agreement. The real effort will be on the appearance of reform, while diluting the power to prevent tax avoidance. The substance of policy has been shaped by corporate representatives and their accountancy firms.

An article ‘Without curbing corporate power the G8 have no chance of combating tax avoidance‘ by Professor Prem Sikka, shows this influence in detail. For example there are policies such as the ‘Patent Box’ which allows companies to pay corporate tax at 10% instead of 22% by linking the profits to patents. It allows the beneficial ownership to be kept in tax havens.

Controlled foreign companies legislation allows companies controlled in the UK but resident overseas to be taxed at 5.25% instead of the full corporation tax rate.

General Anti-Abuse Rule (GAAR) which has been trailed as a measure to discourage organised tax avoidance by focusing on the economic substance rather than the legal form, has in practice been diluted to only affect extreme cases. Her Majesty’s Revenue and Customs (HMRC) have to apply a ‘double reasonableness’ test which will make effective action against corporate tax avoidance extremely difficult.

How did the tax avoiders achieve their policy success? They packed the working parties crafting the legislation with their representatives and consultants. The government defends this, saying that their ‘expertise’ was required. The names of the firms with representatives in the working parties are immediately recognisable for their views on tax. They include GlaxoSmithKline, Rolls Royce, Shell, Diageo, Tesco, Vodaphone, Rio Tinto, Kraft,  Cable and Wireless, HSBC, Prudential and Avia as well as the very consultants who advise them on tax avoidance, such as KPMG, PricewaterhouseCoopers, Ernst and Young and Deloitte.

 

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Azov battalion surrender at the Azovstal steelworks; a symbolic defeat for Ukraine. US, UK & some EU governments still want to fight the war to the last Ukrainian; they continue warmongering and sending weaponry to Ukraine.
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#Russia says it has no problem with #Sweden or #Finland, hence no problem with it joining #NATO. It will however monitor its deployment of troops and weaponry, and take action appropriate to the threats.
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Protests outside the offices of the #NewYorkTimes against coverage of the murder of #ShireenAbuAqleh, by Israelis military, #IDF. The #BBC also reported "violence breaks out at funeral", even though video clearly shows Israelis police attacked mourners.
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In a statement to MPs in late April Ben Wallace Secretary of State for Defence said "gifts of weapons by Britain could eventually total £500m" to Ukraine, as he gloried in the reported of the deaths of 15,000 Russian soldiers. https://www.theguardian.com/politics/2022/apr/25/uk-military-aid-to-ukraine-could-rise-to-500m-mps-told#:~:text=In%20a%20statement%20to%20MPs%2C%20Ben%20Wallace%20said%20gifts%20of%20weapons%20by%20Britain%20could%20eventually%20total%20%C2%A3500m%2C%20and%20he%20said%2015%2C000%20Russian%20soldiers%20had%20died%20since%20the%20invasion%20began%20on%2024%20February.&text=%E2%80%9CWe%20have%20gifted%20in%20aid%20%C2%A3200m%20which%20we%20propose%20will%20grow%20to%20%C2%A3500m%20to%20Ukraine%2C%E2%80%9D%20Wallace%20told%20the%20House%20of%20Commons.

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