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Tax and Ethics

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By ignoring their duty to care, they ignore their ethical duty thus abusing their corporate social responsibility. Their subtle tax circumvention mechanisms are a show of greed and thirst for economic power, which raises ethical concerns. Sources retrieved from Amnesty International indicate, “Starbucks had sales of £400 million in the UK last year, but paid no corporation tax. Amazon, which had sales in the UK of £3.35 billion in 2011, only reported a "tax expense" of £1.8 million And Googles UK unit paid just £6 million to the Treasury in 2011 on UK turnover of £395 million. ” Economic experts from the Wall Street Journal apportion blame to professional advisory agencies.

The professional advisors of the companies themselves have come under fire on the type of advice that they have given which has in turn given rise to the tax avoidance. Key professional services firms such as Deloitte Touché, PricewaterhouseCoopers (PwC), KPMG, and Ernst & Young are equally as guilty as the companies themselves are. Certain experts argue that these advisory agencies are the real culprits. According to the Wall Street Journal, these advisory agencies wilfully mislead and manipulate the companies for their own profitable purposes.

Top economists accuse the advisory agencies of advising the companies on various ways in which they can avoid corporation tax by “exploiting the loophole” of OECD principles. By so doing, the advisory agencies become ‘partners in crime’ so to speak for aiding and abetting tax circumvention through disingenuous practices such as aggressive taxing. Likewise, the mainstream government is equally to blame for the egregious offences. Her Majesty’s Revenue and Customs is unreasonably lenient towards companies that partake in aggressive tax planning.

Amazon, Starbucks, and Google specifically receive gratuitous tax breaks under the auspices of aggressive tax regimes. Economists observe that major multinationals have professional lobbyists whose fundamental role is to persuade the government to design aggressive tax regimes. They achieve this by reaching out to politicians and policymakers in the House. Professional lobbying, as experts reckon, is perhaps the most effective tool of ensuring the survival of major companies since it loosens tax regulation by the mainstream government leading to amendment of lax legislation on the same.

In a recent press release to address the ethical issue of these acts, John Lewis’ managing director, Andy Street urged both the Treasury and Her Majesty’s Revenue and Customs to ensure that money “earned in a particular country” was “taxed in that country. ” Street warned that persistent tax avoidance by powerful economic giants such as Google, Starbucks, and Amazon would drive domestic companies in the UK companies out of business.

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