It’s way time for corporations to pay their fair share of tax
In an article in today’s “Observer” newspaper, Will Hutton puts the case very clearly and concisely:
“If companies in Britain paid, proportionally, as much tax as they did in the last year of Mrs Thatcher’s prime ministership, the country would be £30bn better off. There would still be a deficit, but the fiscal situation would be transformed. The crisis talk of the unprecedented reshaping of the state to the same level – in terms of percentage of GDP – as it stood in the 1930s would recede. It would not be necessary.”
Hutton underlines his main point:
“Even 10 years ago companies were contributing proportionally around £20bn more to the UK exchequer than they are now. If the reduction in corporate tax rates engineered by Mr Osborne had been matched by a surge of investment and high wage jobs, the foregone tax revenue might have been justified. Instead, investment rates languish, rising only very slowly from a very low base – while the British state faces a generational fiscal crisis.”
This is why the diverted profits tax is so necessary and must be just the start of a fairer tax burden:
“So last week Mr Osborne announced the popular profits diversion tax, or Google tax. It is widely advertised that he is doing all in his power to increase the tax take from rogue multinationals who artificially organise their affairs to reduce their British taxes. Company directors have a new duty to notify Her Majesty’s Revenue and Customs every year if, in their opinion, their tax arrangements qualify as artificial: instead of paying 21% corporation tax they would pay a penalty 25%”