At the same time Apple reported trading figures for the first three months of 2021 with another set of astonishing numbers. So much so, that it was able to announce a buy-back of shares worth $90bn – that’s equivalent to the value of BP, and that’s spare cash!
Despite record revenues though, Amazon paid no tax. It reported a ‘loss’ and received €56m in tax credits that it can use to offset any future tax bills should it turn a profit.
Tax avoidance is not illegal but these figures do raise some interesting questions. Why should these companies, who use public services, infrastructure, and workforces paid for by taxpayers benefit when they don’t pay enough into the common pot for the common good?
These companies are not being properly taxed and in the process are undercutting their competitors and those companies that not only talk about being responsible, but actually are.
President Biden has called for sweeping changes to the global tax system, which would include a minimum corporation tax rate that would look to stop companies like Apple and Amazon exploiting loopholes in the system.
It’s a simple call for multinational companies to pay their fair share of taxes and to pay taxes to national governments based on the sales they generate in each country.
The likes of Amazon, Facebook, Google, Netflix, Apple and Microsoft have avoided paying $100bn in tax over the past decade, according to research, and while taxing multinationals will not be easy creating a global minimum tax would make it possible to collect revenue from all these types of businesses. It would also stop a race to the bottom which has seen average corporate tax rates fall from around 40 per cent in 1980 to 24 per cent in 2020.
Some will argue that increased taxes will stymie investment – the UK has cut taxes but has a lamentable record when it comes to investment – and that tax avoidance is simply part of the system.
Fair enough, but governments are confronting global challenges and need money to tackle them, whether that’s climate change, economic recovery or addressing Covid-19.
A minimum global tax will be complicated but, whatever the challenges, it is certainly worth trying to enact a global minimum tax on those companies that could be described as the ‘robber barons’ of the C21.