Editorial: What can be done on corporate tax?

Corporate taxation – avoidance, evasion, the use of tax havens – has rightly climbed up the political agenda, but blaming corporations alone is a dangerous oversimplification

Share

Both the Prime Minister and the leader of the Opposition were in action yesterday, fulminating against companies that choose to be economical with their tax payments. En route to Brussels for an EU summit, David Cameron called on European leaders to  support global remedies against tax avoidance that were causing “staggering” losses to individual countries. Ed Miliband took the argument to Google, attacking its UK tax arrangements at the corporation’s own Big Tent event.

Their comments followed revelations about how little tax the computer giant, Apple, pays in the US and the grilling suffered by a succession of corporate leaders recently at the hands of the Commons Public Accounts Committee. Together, they illustrate how far corporate taxation – avoidance, evasion, the use of tax havens – has climbed up the political agenda, at home and abroad. It will be a high priority when Mr Cameron hosts the G8 summit in Northern Ireland next month.

And that is right, because when capital, companies and intellectual property can cross borders so easily, international coordination is essential. To demonise corporations alone, however, is as much of an oversimplification as it has been to blame the banks alone for their excesses. Yes, there was wrongdoing, but with the banks there were also regulators and shareholders. On the tax front, there are laws, and if those laws do not work, governments have the power, and a responsibility, to change them.

Not so long ago, ministers everywhere competed to court big international corporations for the investment and jobs they would bring. If the tax treatment of business is now out of kilter with the public mood – as it clearly is – then governments must act to make avoidance more difficult and rethink their approach to tax havens. Mr Cameron has to get the UK’s house in order before he tells others what to do.

React Now

iJobs Job Widget
iJobs General

SAP Data Migration Consultant

competitive: Progressive Recruitment: My client, a FTSE 100 organisation are u...

Programme Support, Coms, Bristol, £300-350p/d

£300 - £350 per day + competitive: Orgtel: My client, a leading bank, is curre...

Linux Systems Administrator

£33000 per annum + pension, 25 days holiday: Ashdown Group: A highly successfu...

(Junior) IT Systems Administrator / Infrastructure Analyst

£28000 - £32000 per annum + pension, 25 days holiday: Ashdown Group: A highly ...

Day In a Page

Read Next
Scotland’s First Minister, Alex Salmond, left, is to take part in a live television debate about Scottish independence with Alistair Darling, right, head of the Better Together campaign, if David Cameron continues to refuse to take part  

How a polite message from Canada inspired the campaign against Scottish independence

Andrew Grice
The Government is rushing through an emergency law to allow the state to retain personal data held by internet and telephone companies  

Don't call this the surveillance status quo – it's a cross-party stitch-up

Mike Harris
A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice