Christmas shoppers urged to boycott corporate tax dodgers
December 20, 2012
Christmas shoppers should follow the lead of consumers in the UK by taking a stand and boycotting companies that don’t pay their fair share of tax, according to a tax expert at the University of Western Sydney.
Dr Elfriede Sangkuhl, from the UWS School of Law, worked at Ernst and Young before completing her PhD on the equitable taxation of multinational corporations.
She says many household names consider themselves good corporate citizens, yet through the use of accounting measures and tax arrangements they avoid paying a reasonable tax bill.
“Shoppers who are going online for their last minute Christmas purchases should spare a thought for where their money is being spent, because unfortunately many multinational companies simply don’t pay their fair share of tax in Australia,” Dr Sangkuhl says.
“For example the search and advertising company Google has no problem taking advantage of government supported electricity and broadband infrastructure, but when they are asked to contribute themselves they shirk their responsibilities, avoiding a possible tax bill in Australia of up to $160 million.”
“I believe Christmas shoppers should refuse to give their money to companies like Google, Microsoft and Starbucks until they step up and pay a tax bill that accurately reflects the amount of money they’re making here.”
Dr Sangkuhl says the weekend demonstrations across the UK at Starbucks stores, sparked by revelations the company has paid less than one per cent of its UK profits in tax over the past 14 years, shows consumer anger over the issue is building.
“Once the most profitable companies start avoiding their responsibilities, the tax bill gets passed down the chain to small businesses and everyday people, who already pay their fair share,” she says.
“And why should you and I pay more tax, just so corporations can increase the dividends they pay to shareholders?”
In 2003 the former International Monetary Fund tax policy chief, Vito Tanzi, warned that tax evasion could ‘hollow out the nation state’ as nations would be unable to fund essential government services if they were unable to effectively impose taxation.
“This is the situation currently facing Australia, which is struggling to maintain a budget surplus amid falling tax revenue,” Dr Sangkuhl says.
“The Greek financial crisis can, in part, be attributed to tax evasion and tax avoidance in Greece, and we must be vigilant to avoid structural problems like these from festering in our own economy.”