Ozzie good sense November 27, 2012 at 6:38 am
From a speech by David Bradbury, Australian Assistant Treasurer:
I believe there is a strong public interest in drawing attention to practices that have the potential to undermine the future sustainability of Australia’s corporate tax base… Governments are discovering the lack of effectiveness in the digital age of international tax concepts created for the industrial age… Many in business reject the notion that paying a fair share of tax forms part of a broader social compact, instead believing that it is just another cost of doing business. On this point, I vehemently disagree. These businesses benefit from operating in an economy built on social and economic institutions- our markets and regulators, the rule of law and our judicial system- not to mention physical infrastructure and human capital that is funded or supported by the taxes paid by others. Where some multinational businesses enjoy the benefits of these public goods but refuse to pay their fair share, they are free riding on efforts of others…
There is an increasing recognition that rules designed to prevent double taxation have in some cases resulted in double non-taxation instead – where income is not taxed in any jurisdiction. This situation is unsustainable – it not only weakens the tax base of individual countries but also weakens the international tax system.
This must surely be right. At a time when austerity seems to be stretching into the indefinite future – 2018 at least – we cannot afford to let multinationals and multimillionaires pay little tax while smaller companies and ordinary working people pay more than their fare share. We need to align the law with the ethical position, so that google and the like can no longer behave in a way that is legal but, to use Margaret Hodge’s term, considered `immoral’ by many.