In the UK, tax avoidance and tax-planning by the biggest corporations amounts to around a £25 billion a year deficit in tax revenue. Evading tax is essentially a crime, so how does this happen? According to the pamphlet The Missing Billions published by the British TUC (Trades Union Congress) this is achieved through means such as: moving transactions outside the UK; altering the nature of transactions so that they are subject to capital gains tax rather than income tax; also by abusing of the law on limited companies.
In a period when for the last five years or so, the British government (among others) has been trying to cut back on its spending, particularly in areas such that directly benefit the public services, it’s revealing to reflect on the fact that the amount of money lost to tax avoidance would be enough to finance the building of around fifty hospitals, or to radically reduce the tax burden on those sections of the public who actually need it.
The TUC estimates that over the next few years, as corporate tax on smaller businesses reaches 22%, smaller companies will be paying more tax on their profits than the 50 largest UK companies.
This well-produced pamphlet (part of a series), not only draws conclusions about tax-evasion that are usually avoided, it also suggests a number of ways to alter tax policy in an effort to retrieve the ‘missing billions’ and to use this to benefit the public services.
Even if you think taxation is government theft, under the prevailing economic structure, it’s not a comforting thought that the very rich and the obscenely rich are operating in and benefiting from societies whose tax bills are footed by those less well positioned to pay them.