Sunday, 31 January 2016

Tax compromises with big business are unacceptable

All governments need a sufficient resource to provide vital public services, to tackle problems in society such as unemployment and poor housing, to invest in key infrastructure, and to do so much more.

Such a resource comes principally from taxation, the importance of which has been summed up extremely well by the Australian community worker and writer Chris Middendorp:

“If you bother to reflect on the role that taxation plays in a democratic state, it's almost impossible not to conclude that it is what makes a civil society achievable. Not just by funding a police force, a fire brigade or a defence force. Not just by paying for roads, public transport, gardens and parks. Not just by building hospitals, libraries, schools and sewerage systems. But by funding practically everything that makes it possible for human beings to flourish.”

I fully endorse Mr Millendorp’s view, and that taxation must be progressive, with big business and the well-off paying their fair share.

And that is why I find it unacceptable that the Government has agreed a “sweetheart” deal with the giant multi-national company Google to pay just £130 million to cover a decade of unpaid taxes.

The Chancellor of the Exchequer described the deal as a "victory" for the government. It wasn’t. It has been pointed out by some opponents that the “effective rate of tax faced by Google” would be only three per cent, while the Independent newspaper has suggested that Google “may owe as much as £700 million in UK taxes.”

Unbelievably, HMRC has publicly declined to report how it calculated the tax liability of Google "for reasons of confidentiality" and I guess it is hardly surprising that a ministerial colleague of George Osborne has been reported as claiming that “a five-year-old could have done a better job with this deal.”

The deal has also been criticised by former Tory Chancellor Lord Lawson who described it as “profoundly unsatisfactory,” adding that it was wrong that tax had to be collected from large multinational corporations through “a series of ad hoc compromise deals.”

Put bluntly, I think it is a disgrace that central government is allowing big business and the super-rich to dodge taxes, while slashing public spending because it is failing to raise enough tax revenues.

This is a nonsense, especially when ordinary people are paying all their taxes (whether income tax, council tax, VAT, etc) while seeing many of their public services decline because of the same Government’s austerity measures.

[This will be my article in this coming week's Cornish Guardian].

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