PM denounces 'aggressive' tax avoidance by international firms

Cameron stresses 'moral' case for companies to pay fair share in return for governments seeking to keep taxes low

David Cameron today denounced “aggressive” tax avoidance by international corporations, but warned the practice was difficult to outlaw.

Speaking on the first full day of a trade mission to India, he said there was a “moral” case for companies to pay their fair share in return for governments seeking to keep taxes low.

The Prime Minister has made transparency over tax a priority of Britain’s presidency this year of the G8 group of the world’s major economies following controversy over the tax arrangements of such companies as Starbucks, Amazon and Google.

George Osborne, the Chancellor, is also leading international work over how to prevent large firms side-stepping tax by shifting their profits between countries.

However, Mr Cameron spelt out the practical problems of cracking down on tax avoidance in a speech at Unilever's headquarters in Mumbai.

“Some would say, 'Just change the law to make aggressive avoidance illegal', but, with respect to my friends in the accountancy profession, it is difficult to do that,” he said.

“I think there is a legitimate debate to say very aggressive forms of avoidance are not appropriate.

“And particularly, in a country which has set a very low tax rate, it is fair to ask people to pay it."

He said: “I believe in low taxes. Governments should be trying to get their rates of tax down so they are competitive, but then I think it is only fair to ask businesses to pay them.

“My position is taxation is a part of the cost of doing business, but I think there is a deal.

“The deal in my country, which I want to be very frank about, is that you have a government that is cutting the levels of business taxation, we are cutting the rate of corporation tax on company profits, down to 21 per cent. That is a good, low, competitive rate.

“The message to business should be: ‘If we are cutting this rate of tax down to a good low level, you should be paying that rate of tax, rather than seeking ever more aggressive ways to avoid it’.

“I think there has been a problem in this debate in the past, in that people have said there is a difference between tax evasion - which is illegal and should be pursued by the full force of the law - and tax avoidance, which is perfectly legal and OK.

“I think the problem with that is that there are some forms of tax avoidance that have become so aggressive that there are moral questions that we have to answer about whether we want to encourage or allow that sort of behaviour.”

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Purchase Ledger Administrator

£5120 per annum: Recruitment Genius: You will be working for one of the countr...

Recruitment Genius: Engineering Surveyor

£20000 - £23000 per annum: Recruitment Genius: An opportunity has arisen for a...

Recruitment Genius: Customer Services Support

£9000 per annum: Recruitment Genius: You will be working for one of the countr...

Recruitment Genius: Junior Estimator

£17000 - £18000 per annum: Recruitment Genius: An opportunity has arisen for a...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence