There is a lot of conflict uproar in the UK at present over tax evasion by the large corporations and wealthy individuals. UK Uncut is invading retail stores belonging to companies they believe don’t seem to pay much or any UK Corporation Tax. And this is against a backdrop of major cuts to the provision of benefits to poor citizens.
One story posted in a comment about the UK Uncut demonstrations struck me forcefully, though I cannot locate the exact quote. An anonymous accountant for one of the UK’s largest accounting firm posted the story so I cannot guarantee its accuracy. He said that some years ago a major Japanese company had set up business in the UK, and came to the accounting company for advice on their tax affairs. The accounting company did its usual tax minimization presentation. Half way through, the Japanese senior executive for the UK stopped them. He said: ‘You don’t understand, we aim to be good corporate citizens here in the UK. We want a good reputation, as well as to make good profits. But we want to pay an appropriate level of taxes, not order our affairs to, however legally, to avoid paying this sensible level of taxes.‘ The accounting company were rendered speechless and had to adjourn the meeting to re-group and figure out a way of meeting the client’s totally novel request.
It is almost impossible to imagine such a story happening with a US or UK company. Indeed the executive might be legally liable for not maximizing short term profits. But perhaps the time has come for full transparency of just how much tax, the companies whose products we consume, actually pay. It would be like Fair Trade Coffee: we can choose to buy from companies that actually pay taxes proportional to their profits. Of course, governments should also crack down on tax evasion and tax avoidance, but the citizen can and should have some consumer power in this matter too. And companies should be required to start their annual accounts with a statement for the last 10 years of their gross profits and their tax payments to aid this transparency and then someone can post the results in tabular form on the net for all major UK companies for example.