I guess the supporters of Amazon could argue they are happy to pay higher tax rates themselves in order to support the avoidance of tax by the company. Unfortunately, it is only big companies, and especially multinationals who are able to implement this approach. So, it isn’t just the Amazon supporters who are paying the extra tax to make up for what Amazon avoids. It is also people who do not wish to support Amazon. One of the points that has been made lately is that small business has no way of avoiding tax. Booksellers have been discussing the idea of becoming a huge corporate body in order to avail themselves of the possibilities, but the fact is who wants to do that? We live in a society. Tax is part of that. It seems to me it is sociopathic to try to avoid this part of social life.
In the UK people have been trying to do something from the bottom up to enforce the payment of tax by Amazon. This has led to a petition signed by 170,000 people presented to parliament. The following is part of the speech that accompanied it.
Chris White (Warwick and Leamington) (Con):….
However, this avoidance is not without its victims. It is businesses such as Warwick Books in my constituency and ordinary people who pick up the bill. Through this creative tax planning, the burden of taxation is shifted on to individuals and businesses that do not have the resources to spend on reducing their tax bill and on hiring expensive accountants to find loopholes in tax law.
I understand that there are some who believe that businesses have a moral duty to pay only the absolute minimum of tax that they are legally obliged to pay, but I cannot believe that that is the case. Businesses, even multinational companies, are still members of society. They benefit from a strong education system, a functioning health care system, decent roads, a transport infrastructure, the police and our armed forces. The reason we raise taxes is in order to produce public goods. We can argue whether the Government spend that money wisely, or whether the Government should provide this or that service, but that is the basic principle behind taxation.
Businesses have a moral responsibility to play a full part in our society, and structuring their businesses in order to avoid taxation and to make it harder for tax authorities to monitor their business is not fulfilling that responsibility. Voluntarily paying tax is not a long-term solution to this issue. What is needed is for multinational companies to take responsibility for their actions and respect the fact that they need to structure their businesses to reflect the way they are operated, rather than merely to avoid that taxation…..
Many of these companies depend on individuals and businesses buying their services, but as they avoid taxation, the Government have to find this revenue from other sources, reducing the profits and incomes of others and leaving them with less to spend on other goods and services. The regulatory arms race between multinational companies and states seeking to raise revenue is also distracting. It is distracting the corporations from focusing on productivity and creativity, and one wonders what marvels or products might have been created if multi- nationals had put the effort they put into avoiding tax into developing new ideas, services and products….
The sheer mechanics of the situation make it clear that action purely from the Government is unlikely to be the solution to the problem. There are hundreds of thousands of multinational companies, and only a handful of tax regimes capable of monitoring their information. It is always a game of catch-up, and while reforming tax codes and greater enforcement may help, they will not reach the nub of the problem. That is why I believe that we need to focus on the culture in international business, on the structure of these businesses and the codes of conduct they abide by. Fundamentally, businesses are staffed by people, and if we put in place the right frameworks, I believe that we can appeal to the better angels of their nature. This is the only long-term solution.
This isn’t rocket science. Paying tax is a moral duty. Moral for human beings, moral for businesses. The simple way for businesses to understand this is to boycott them unless they behave in the right way. It isn’t a game. It isn’t about what you can get away with.
For the discussion in detail – Amazon is scarcely the only offender, but is the most high profile – go to the hansard papers here.